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Over the past few years, India has emerged as a strong voice in multilateral trade
negotiations despite being a relatively modest trader. The Indian trade negotiator, the late
Murasoli Maran, shot to global prominence during the Doha ministerial meeting of the
World Trade Organization with his refusal to endorse the Doha declaration without
receiving reassurance that the “new” or “Singapore” issues would not be discussed unless
developing countries felt comfortable doing so. Before Cancun, India was instrumental in
putting together a new coalition of developing countries that has played a significant role
ever since. India was also part of the group of five countries that hammered out
differences in trade in agriculture prior to the drawing up of the framework agreement in
July 2004. Along with this surprising level of proactivity, India has taken up very strong
positions on agriculture and on the Singapore issues that have been consistently opposed
to the positions taken by the United States and the European Union and has thus often
been dubbed obstructionist.
India’s position at the negotiating table in the World Trade Organization meetings
presents us with an interesting empirical paradox. Since 1991, India has gradually opened
up its economy both internally (by allowing more competition domestically) and
externally (by removing several barriers to generate more and freer trade and foreign
investment). Trade liberalization has taken place in several successive episodes whereby
export subsidies and quantitative restrictions on trade have been removed and tariffs have
declined in most capital goods and intermediate goods and in some consumer goods
(Srinivasan and Tendulkar 2003). The peak tariff rate was brought down from 355% in
1990 to 35% in 2002. The aim of the government is to have a simple two-level tariff
structure by 2004-05 with no tariffs over 20%. In many cases, the government has
dismantled restrictions on trade much ahead of the time schedule that it committed to
under the Uruguay Round Agreements (URA). Clearly, a number of new sectors such as
business process outsourcing, pharmaceuticals, software have benefited from this
increasing global integration. Yet, even after a decade of tariff reduction, Indian tariffs
remain high among emerging economies. Till the 2001 WTO ministerial meeting at
Doha, India was at the forefront of developing country resistance to starting a new round
Convention