Question
Examine the implications of World Trade Organisation (WTO) agreements on Indian agriculture. Also, outline India's agricultural trade policy.
Answer :
Word Count : 1211
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The establishment of the World Trade Organization in 1995 marked a significant shift in the global trading system by bringing agriculture under a rules-based multilateral framework. For India, a predominantly agrarian economy with a large proportion of small and marginal farmers, WTO agreements have had far-reaching implications in terms of market access, domestic support, export competitiveness, food security, and agribusiness management. The most relevant agreements affecting Indian agriculture include the Agreement on Agriculture (AoA), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the Agreement on Sanitary and Phytosanitary Measures (SPS). These agreements have reshaped agricultural trade policy and the functioning of agribusiness in India. The Agreement on Agriculture rests on three pillars: market access, domestic support, and export competition. Under market access, member countries were required to convert quantitative restrictions into tariffs and reduce them over time. India, as a developing country, committed to binding its agricultural tariffs, though often at relatively high ceiling rates. This gave India flexibility to raise applied tariffs within bound limits to protect domestic producers from import surges. The removal of quantitative restrictions in 2001, following a WTO dispute, exposed Indian farmers to global price volatility. Consequently, Indian agribusiness firms have had to become more competitive in terms of cost efficiency, quality standards, and supply chain management. In terms of domestic support, the AoA categorizes subsidies into Amber Box, Blue Box, and Green Box measures. India’s product-specific support, measured through the Aggregate Measurement of Support (AMS), has remained within the de minimis limit of 10 percent of the value of agricultural production for developing countries. However, the method of calculating market price support based on a fixed external reference price of 1986–88 has raised concerns regarding the legality of India’s Minimum Support Price (MSP) operations, especially for rice and wheat. The public stockholding program for food security, implemented through the Public Distribution System, has been a contentious issue at the WTO. India, along with other developing countries, has advocated for a permanent solution to protect food security programs from legal challenges, emphasizing that such programs are essential for livelihood security and poverty alleviation. Export competition under the AoA required reductions in export subsidies. India historically provided limited direct export subsidies but used instruments such as transport assistance
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