India has strongly rebutted the US criticism about inadequate market access stating that its “increasing merchandise trade deficit speaks for itself and has an eloquent story to tell”. In the first five months of 2011-12, the country’s trade deficit stood at $55 billion, more than half that of full year 2010-11 at $104.82 billion.
Replying on behalf of India at the Trade Policy Review (TPR) in Geneva, Commerce Secretary Rahul Khullar, said, “Year after year, our imports have outpaced exports. We have a very large trade deficit, which as a percentage of the GDP is one of the highest in the world. It is expected to increase to 11.5 per cent of the GDP in 2013-14.”
Amongst other things, the US had expressed disappointment at India’s reluctance to participate in meaningful market opening through the Doha Round negotiations. Michael Punke, US Ambassador to the WTO, had criticised India’s alleged lack of transparency, besides several other issues, during the TPR in Geneva. The review is a regular examination of trade liberalisation achieved by every member of the World Trade Organization and is done by peer members.
On concerns raised about trade remedies (tools that allow governments to take remedial actions against imports when they harm domestic industry), the commerce secretary said that India does not have a protectionist intent. “If we had a protectionist intent, then the easy route of increasing the tariffs up to the bound rates was available to us. We have not gone down that road.” He said while some members claimed that India has 12 safeguard measures in force, it has just one safeguard duty in force now. Investigations relating to anti-dumping are fair and subject to strict scrutiny. “As a rule we impose the lesser duty (anti dumping duty) and not the full dumping margin as is done by some members,” Khullar said.
Further, Khullar noted that export restrictions were used for purposes of domestic supply management, but these have been purely on a temporary basis. Regarding the country’s import licensing regime, termed as complex by some WTO members, he said licenses are granted in a non-discriminatory basis and the regulations pertaining to them are placed in public domain and the Directorate General of Foreign Trade acts as the nodal agency.
According to Khullar, the country has simplified its FDI regime and is in the process of ushering in reforms in the indirect taxes and direct taxes.