Trade Policy Review

Report by

India

Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), the policy statement by India is attached.

Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on India.

Contents

1   Introduction.. 4

2   ECONOMIC ENVIRONMENT. 4

2.1   Recent Growth Record. 4

2.2   Savings and Investment 5

2.3   Inflation. 5

2.4   Exports, Imports and Trade Balance. 5

2.4.1   Merchandise exports. 6

2.4.2   Merchandise imports. 6

2.4.3   Trade Balance. 7

2.4.4   Direction of Merchandise Trade. 7

2.4.5   Services Trade. 8

2.5   Foreign Investment 9

2.5.1   Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII) 9

2.5.2   Outward Investment by India. 9

2.6   Major Challenges. 9

2.6.1   Agriculture and Food Security. 9

2.6.2   The Manufacturing Challenge. 10

2.6.3   Infrastructure Development 10

2.6.4   Increasing demand on public investment and the need for fiscal discipline. 11

3   The New Reform Agenda. 11

3.1   Ease of Doing Business. 11

3.2   Make in India. 12

3.3   Reforms in FDI policy. 12

3.4   Introduction of Goods and Services Tax. 12

3.5   Skill development 12

3.6   Labour-sector reforms. 13

3.7   Fostering Inclusive Growth. 13

3.8   Rationalizing Subsidies. 13

4   TRADE POLICY. 13

4.1   Foreign Trade Policy. 13

4.2   Trade Facilitation Measures. 14

4.3   Trade Policy Challenges. 15

5   INDIA AND THE WTO.. 15

5.1   WTO Negotiations. 15

5.2   Duty Free Quota Free (DFQF) Access. 17

5.3   LDCs Services Waiver 17

6   REGIONAL AND BILATERAL ARRANGEMENTS. 17

6.1   South Asia Region. 18

6.2   South East and East Asia. 18

6.3   Australia and New Zealand. 18

6.4   Americas. 18

6.5   Europe. 18

6.6   Middle East and Africa. 18

6.7   Other Agreements and Negotiations. 18

7   CONCLUSION.. 19