Now Reading: WTO review flags India’s high tariffs, farm subsidies as growth hurdles
-
01
WTO review flags India’s high tariffs, farm subsidies as growth hurdles
WTO review flags India’s high tariffs, farm subsidies as growth hurdles
The World Trade Organization's latest Trade Policy Review of India, released on March 12, notes that high average tariffs and agricultural subsidies remain key barriers to the country's goal of becoming a…
The World Trade Organization's latest Trade Policy Review of India, released on March 12, notes that high average tariffs and agricultural subsidies remain key barriers to the country's goal of becoming a developed nation by 2047, a target the government calls Viksit Bharat. The review says India's simple average applied tariff stands at 17%, among the highest for major economies, and criticises the heavy subsidies for fertiliser, food and fuel that distort markets.
On the positive side, the WTO acknowledges India's rapid recovery from the pandemic, driven by strong domestic demand and public investment in infrastructure. It also praises India's growing role in digital trade and services exports, which have helped narrow the current account deficit. The review warns that further tariff liberalisation and reducing non-tariff barriers could boost India's global competitiveness and attract more foreign investment.
The report recommends streamlining customs procedures and reducing import restrictions that create uncertainty for businesses. India's trade-to-GDP ratio has declined from 55% in 2012 to 43% in 2020-21, reflecting slower global integration. The next step is internal: whether New Delhi acts on the review's suggestions ahead of the next ministerial meeting.
Indian Opinion Analysis
India’s retaliatory tariffs on US goods during the Trump-era trade disputes remain in place even as Washington presses for lower barriers. The WTO review’s soft criticism of India’s high-bound tariffs and agricultural subsidies echoes findings from earlier rounds, notably the 2021 review. Domestically, the challenge is balancing protection of 260 million farmers with the market access needed for export-led growth, a goal central to the Viksit Bharat target for 2047. With the next Trade Policy Review likely in 2027, India has until then to show progress on binding tariff reductions or risk formal dispute filings by trading partners.
Source: indiasworld.in
This story was synthesised by AI from the source linked above.
