Calcutta: India is in favour of a stronger World Trade Organisation amid concerns over rising trade barriers being erected by major economies that could potentially jeopardise global trade.
“At present, it is the most challenging time for global trade. The existence of WTO itself is under threat. People are questioning the accepted trading norms. The fundamentals of global trade are under scrutiny,” said Union commerce and industries minister Suresh Prabhu at an event organised by the Federation of Indian Export Organisations on Saturday.
The minister added that without the trade regulator, most countries would face problems. He added that India was working with other countries to further strengthen the organisation.
“If you don’t have WTO, all countries will face problem. We strongly feel WTO is a must because it lays down certain rules and regulations to run the global trade. So our strategy in India is to ensure that we keep the WTO alive and make it strong,” Prabhu said.
“We are working on how to revitalise WTO. I am personally working with important ministers of the world. Improving WTO is one thing and discarding it (altogether) is another,” said Prabhu.The role of the global trade regulator has gained importance as two economic giants – the US and China – engage each other through tariff wars.
A WTO report on the trade measures taken by the G20 countries between mid-October 2017 and mid May 2018 revealed that a total of 39 new trade restrictive measures were applied by these economies during the period, including tariff increase, stricter customs procedures, imposition of taxes and export duties.
“This continued escalation poses a serious threat to growth and recovery in all countries… I urge G20 leaders to show restraint in applying new measures and to urgently de-escalate the situation,” WTO director-general Roberto Azevêdo has said in a statement.
Prabhu said India has worked out a market research-based approach to boost exports by taking inputs from different agencies. FIEO has worked out a strategy for additional exports of $100 billion based on analysis of India’s exports during the 2007-12 and 2012-17 period as well as growth in global trade in the said period. The strategy focuses on 685 products at six digit tariff lines.
The minister also said that access to bank credit is emerging as a major concern of Indian exporters and the government is evaluating whether export credit can be incorporated as part of priority sector lending of banks.
At another event on Saturday, Prabhu said there is a misconception that India is providing subsidies to its exporters. The country is helping to minimise the adversities they suffer in the global markets.
“This is a misconception that we subsidise our exports but in reality we don’t subsidise exports. What we give to the exporters in India is not any subsidy or incentive to promote exports but to partially offset their inadequate infrastructure support and high interest cost,” Prabhu said. “We are trying to minimise the adversities they (exporters) suffer from.”
The US has challenged Indian export subsidy programmes at the WTO. He said the ministry is working on preparing an integrated logistics plan to reduce costs and increase speed and efficiency.