Papers by Prof. Murali Kallummal
Routledge India eBooks, Nov 7, 2022
SSRN Electronic Journal, 2021
India Studies in Business and Economics, 2021
The electronics industry—the hardware core of the digital economy—is strategic for any country be... more The electronics industry—the hardware core of the digital economy—is strategic for any country because of the rapid expansion in the adoption of digital technologies across sectors. Several policy reforms have been carried out by successive governments to attract FDI and to promote global value chain (GVC) engagement by Indian electronics firms, with a view to upgrade their technological capabilities and to increase electronics exports from India. Against this backdrop, the present paper seeks to analyse the nature of FDI-driven engagement of Indian electronics firms in industry value chains. Based on a critique of the existing approaches for examining GVC participation based on intra-industry trade (IIT) or trade in value added (TiVA), the paper presents an alternative methodological approach and examines the nature of value chain participation of foreign-owned firms through an analysis using firm-level data. Analysis of the value chain engagement of a large FDI-recipient Indian el...
The difference between protection and protectionism is very thin and tricky. WTO members have the... more The difference between protection and protectionism is very thin and tricky. WTO members have the right to take measures to protect human, animal and plant life or health. However, the measures have to conform to international standards. If the measures deviate from international standards, these must be backed by sufficient scientific evidence or be based on appropriate risk assessment. Our study clearly establishes that in a large number of agriculture products of export interest to India the MRL standards are significantly more stringent than the Codex international standards.
This is subject to variation as per merger and acquisitions and other related activities.
SSRN Electronic Journal, 2017
With the world rapidly transforming from multiple singular, isolated regions to Marshall McLuhan’... more With the world rapidly transforming from multiple singular, isolated regions to Marshall McLuhan’s ‘Global Village’, there has been a phenomenal rise in exchange – of goods, services, people, culture and whatnot. Among these, International Trade has acted as the first catalyst of eroding geographical boundaries and traversing continents, itself multiplying in the process. Beginning in the last decades of the century, the WTO, through intense negotiations and agreements, has been successful in lowering tariffs to sustainable levels. But as simple average most-favoured-nation (MFN) tariffs declined, application of alternative protectionist measures such as standards/regulations as trade policy instruments witnessed a surge. These Non-tariff Measures (NTMs) have now become the hot potato of International trade discussions, regularly featuring in WTO’s agenda.<br><br>Imbalance in market access still prevails in the global arena between developed and developing countries, primarily owing to rising NTMs. This issue is alarming in the case of agricultural trade, wherein the WTO negotiations have led to substantial disciplining of the tariff structure (with 100 percent binding of tariffs) and are expected to further it at the culmination of the Doha Round, while the use of non-tariff measures (NTMs) are on the rise. <br><br>The working paper is divided into six sections. Section I provides a brief overview of the concept of NTMs and the various ways they are classified. Section II focuses on SPS measures, elaborating on their origin, legal provisions, need and other relevant issues. Further, Section III includes a short review of previously conducted similar studies and their significant findings. Section IV and V form the backbone of the paper, elucidating the empirical results of the study conducted – the Analysis of SPS Notifications on multiple grounds. While Section V highlights significant problem areas, Section VI enlists chief policy recommendations that can be quickly adopted by the stakeholders to simplify international trade. <br><br>We have established it through finding difference across the three classifications used for this work: the WTO classification; income-based World Bank Classification and the agricultural sector share to GDP or GDP based classification. This work has divided the 164 WTO members into three categories of above 25 percent; less than 25 to 10 percent shares of the agricultural sector; and lastly less than 10 percent shares. It brings to the forefront that the developed countries are the primary cause of this surge in NTMs.
SSRN Electronic Journal, 2020
India and China have significant bilateral trade flows leading to trade specialization in differe... more India and China have significant bilateral trade flows leading to trade specialization in different product categories. The bilateral trade between these countries is clearly dominated by the Chinese exports. The trade figures show that the value of India’s import from China stood at USD 71.9 billion against its exports to China USD 12.4 billion. This paper evaluates the trade barriers faced by India in China’s market focusing mainly on electrical machinery sector. The empirical analysis shows that China has hidden trade barriers in electrical machinery sector by replacing the use of ad-valorem tariff with non-ad valorem tariff (AVE’s). This study will help India to address the issue of market access and demand removal of trade barriers in the electrical machinery sector while negotiating at the RCEP with China to address the issue of trade imbalance.
SSRN Electronic Journal, 2018
Globally the private/voluntary standards have found significance with the increasing role of glob... more Globally the private/voluntary standards have found significance with the increasing role of global value chain coupled with globalisation and liberalisation initiative by emerging markets. It is also linked to the more prominent role of the private sector in such activities of commerce from the 1970s onwards. The global commercial history after the second world war can be broadly divided into two phases, the first phase of 1946 to 1970 a period dominated by the state-led initiative of regional groupings. The second phase begins with post-1970s wherein the private sector had a direct or indirect role is steering the various trade grouping and negotiations. The United Nation has played differential roles since the inspection under the two broad phases. The pronounced role of the UN is that of a neutral player within the divided world this has witnessed an erosion since the beginning from the 1970s. The increased role of the private sector has led to various initiatives driven by their interests. <br><br>One such initiative has been the private/voluntary sustainability standards (P/VSS). The example is of a pressure cooker wherein the ‘value’ is private sustainability standards. There would be little interest in the more significant globally on sustainability issues which is more of a public good when the private sectors are actively driving the global processes. Therefore, the likely impacts need to be analysed in detail. The section is the part two of the three-part draft report titled “Emergence of Private Sustainability Standards: Concerns and Challenges for India’s Exports and Domestic Industries”. Chapter two of part one of the Report addresses the trend and usage of the VS/ PSS in India. It further highlights the challenges in doing so owing to lack of clear distinction - given the lack of consensus-based definition of VS/ PSS. Some private standards have evolved to become the private sustainability standards. Globally the voluntary/ private standards numbered are 624, with minimal number graduated to become truly PSS. Secondly, it traces the origin of the understanding of all existing VS/ PSS to United Nations Conference on the Human Environment (1972). In this context, inter-ministerial coordination between finance, labour, health, environment and commerce could help Indian industries – by way of active participation in standards-setting processes and adoption of more regional standards. There are no agencies assigned formally by the Department of Commerce (DoC) for record of VS/ PSS present and operating in India. Given its importance for international trade for India, there is an urgent need to keep a record of all VS and PSS. These would help in the impact analysis of the domestic adoption in the context of exports and coordination of value chains.
Agrarian South: Journal of Political Economy, 2018
Developed countries are major importers of agricultural and food products from developing countri... more Developed countries are major importers of agricultural and food products from developing countries. While international trade in agricultural commodities has expanded, there has been growing consciousness by consumers about the quality of imported food products. The WTO members are legally authorized to impose sanitary and phytosanitary (SPS)-based maximum residual level (MRL) standards on imported food products to ensure that the imports are free from contaminants. Compliance with SPS-based standards and regulations is challenging for firms belonging to developing countries, for reasons including information asymmetry and lack of technological capabilities. This article uses data on Indian firms, and the SPS measures imposed by the USA on Indian products to analyse how SPS measures impact on the performance of
Even as the Doha Round seeks to address tariff liberalization issues in a comprehensive manner, t... more Even as the Doha Round seeks to address tariff liberalization issues in a comprehensive manner, the imbalance in the outcome of market access for developing country exporters will be particularly glaring in the case of fresh agricultural and processed food products. There is growing evidence that protectionism from the usage of non-tariff barriers such as SPS measures has increased tremendously in the recent past. This paper presents an analysis of the SPS notifications made by WTO Member countries during 1995-July 2010. It is found that 53 per cent of total SPS notifications during that period were made by developing countries. However, developed countries are using their national standards to a more significant extent than developing countries. The adoption of differing national standards creates significant barriers to trade, with developed country standards being higher in many cases. Frequently, these standards are not matched by developing countries' technological capabilities. Furthermore, there are some systemic issues in the SPS Agreement and its implementation that bias its outcome against developing and least developed countries. Thus there is an urgent need for discipline in the usage of SPS measures as a tool for "disguised" protectionism. This can be best achieved by harmonizing the standards across WTO Members under the three intra-governmental bodies already identified by the SPS Agreement. Given the principle of national treatment, this means that the imperative for developing country governments to support the technological upgradation of their domestic agricultural sectors has become more urgent than ever before.
Agrarian South: Journal of Political Economy, 2015
This article examines one of the major systemic issues in the process of negotiation under the Do... more This article examines one of the major systemic issues in the process of negotiation under the Doha Round of the World Trade Organization (WTO): the tariff lines with non-ad-valorem (NAV) duties in agricultural and allied products (A&AP) and further the process of ad-valorem equivalent (AVEs) calculations. By analyzing the trade policy instruments of the QUAD countries (the United States, the EU, Canada and Japan), plus Switzerland, and comparing them with those of eight developing countries, it clearly reveals how the QUAD Plus countries have added to the overall imbalances in both tariff and non-tariff measures, thereby further constraining market access for developing countries’ exports in agriculture and allied sectors.
The present study attempts to analyze the trade creation and trade diversion effects of the India... more The present study attempts to analyze the trade creation and trade diversion effects of the India Sri-Lanka FTA (ISFTA) at the sectoral level. The major sectors identified for the study are textiles, base metal and machinery equipments. The sector specific analysis is a departure from the existing studies that analyses the trade creation and trade diversion effects of the ISFTA. The methods that have been relied upon in identifying the sectors are the indices such as Revealed Comparative Advantage (RCA), Vertical Intra Industry Trade (VIIT) Finger-Kreinin (FK) and the unit values of exports and imports (taken as a proxy for export and import prices) and the trends in trade flows. After identifying the sectors that requires a close empirical scrutiny we use a partial equilibrium modeling approach (SMART model) to simulate the likely trade creation and trade diversion effects under the proposed tariff reduction scenarios. Overall, the results suggest that ISFTA will cause significant ...
In 1999, 96 out of 127 (76%) countries were politically decentralized, while only 52 of the 127 c... more In 1999, 96 out of 127 (76%) countries were politically decentralized, while only 52 of the 127 countries (41%) had fiscal decentralization. Countries with higher development (income) were found to have had both fiscal and political decentralization. The two regions which topped the list were the US and Western Europe. See Work, Robertson, 2002. "Overview of Decentralization Worldwide". 2nd International Conference on Decentralization. Manila.
SSRN Electronic Journal, 2022
The world is facing an unprecedented health crisis in the form of COVID-19, which has had a profo... more The world is facing an unprecedented health crisis in the form of COVID-19, which has had a profound effect on the global economy, trade, and the multilateral trading system. The event has single-handedly led to the adoption of economically challenging and stringent measures by Members, which in turn have led to production and consumption scaling back and forth across the globe. However, at the same time since the outbreak, several initiatives have also been taken by the WTO for better cooperation and coordination amongst Members. One such proposal was a declaration on “Trade in Essential Goods for Combating the Covid-19 Pandemic”, which was launched by Singapore and New Zealand on 15 April 2020. This paper aims to analyze the implications of the proposal mentioned above. It was found that if the negotiations are successful, then they will have far-reaching adverse impacts on several developing countries. Therefore, the paper has found some inconsistencies in the healthcare sector sectoral suggested by Singapore and New Zealand. Trade enhancing results can only be expected if these inconsistencies are appropriately addressed to mention. Some are the Ad Valorem Equivalents (AVEs) for the specific duties allied by members and the large application of SPS and TBT measures across the WTO membership. Partial Equilibrium Analysis (SMART) is used to capture the Trade Creation and Trade Diversion impacts.
It is an established fact that over the years non-tariff measures (NTMs) have been replacing the ... more It is an established fact that over the years non-tariff measures (NTMs) have been replacing the tariffs and these are now increasing being used as a trade policy instrument to discourage market access-for imported products that may be faced domestic/regional competitors. It is achieved by the indiscriminate use of national standards; the SPS Agreement provides ample scope for such deviations from the internationally harmonised standards. In this context, the present study analyses the export performance of India in the Environmental Goods (EGs) for three separate lists i.e., OECD, APEC and WTO, of the three list the best suited from India's point of view of trade balance and export competitiveness will be identified. An attempt is also made to analyse the most suitable for the purposes of negotiations, i.e., in which the imbalance between the tariff liberalisation and the escalation in non-tariff measures does not exist. It also takes into account which has the least embedded non-tariff measures (NTMs-like SPS and TBT).Finally, an attempt is also made to analyse the impact of liberalisation of Environmental Goods (EGs) and its indirect impact in the form of liberalisation of the fourteen (14) Sectoral proposed under the Non Agricultural Market Access (NAMA) Draft Mandate of December 2008. The results suggests that India is having a positive trade balance only under the WTO list (i.e., with world as trade partner) which indirectly means with all the non-proponent countries. However, under all three lists India has negative trade balance with the proponent countries. This highlights possibility of India diversifying of India's exports into the markets of non-proponent countries. One of the reasons for this could be lesser stringent standards that were being imposed in these countries in comparison to the proponent countries. For example, if the number of notifications is taken as a simplified measure of stringency. Then the total number of SPS and TBT measures notified by eight proponent countries is 8,151 notifications, while the rest of WTO membership (152) notified 16,800 notification in the EGs category. Therefore, the average notifications per proponent countries is 10 time higher when compared to non-proponent countries. It further indicates toward a creation of global supply chain in the EGs sector; with India becoming a part of the whole supply chain integration. This is evident from the manner in which the intermediary goods imports is increasing from developed countries, thus creating a trade deficit with nearly all the proponent countries. Further, the assembled products are exported to diverse set of countries both developed and developing countries (classic examples are the solar and wind energy products etc.). In final analysis, the observation show that at least six sectors were indicated to have an indirect consequence of the EGs liberalisation, as the HS tariff lines are spread across these sectors. These sectors are, Bicycle and related parts; Forest products; Automotive and related parts; Electronics/electrical products; Industrial machinery and Enhanced healthcare. Of these two sectors are in which mandatory participation by India was sort by some of the proponent countries. Therefore, it is critical for India to fully understand the implications of EGs Plurilateral liberalisation as it may be making binding committing like the ITA-I Plurilateral Agreement of 1997.
It is an established fact that over the years non-tariff measures (NTMs) have been replacing the ... more It is an established fact that over the years non-tariff measures (NTMs) have been replacing the tariffs and these are now increasing being used as a trade policy instrument to discourage market access-for imported products that may be faced domestic/regional competitors. It is achieved by the indiscriminate use of national standards; the SPS Agreement provides ample scope for such deviations from the internationally harmonised standards. In this context, the present study analyses the export performance of India in the Environmental Goods (EGs) for three separate lists i.e., OECD, APEC and WTO, of the three list the best suited from India's point of view of trade balance and export competitiveness will be identified. An attempt is also made to analyse the most suitable for the purposes of negotiations, i.e., in which the imbalance between the tariff liberalisation and the escalation in non-tariff measures does not exist. It also takes into account which has the least embedded non-tariff measures (NTMs-like SPS and TBT).Finally, an attempt is also made to analyse the impact of liberalisation of Environmental Goods (EGs) and its indirect impact in the form of liberalisation of the fourteen (14) Sectoral proposed under the Non Agricultural Market Access (NAMA) Draft Mandate of December 2008. The results suggests that India is having a positive trade balance only under the WTO list (i.e., with world as trade partner) which indirectly means with all the non-proponent countries. However, under all three lists India has negative trade balance with the proponent countries. This highlights possibility of India diversifying of India's exports into the markets of non-proponent countries. One of the reasons for this could be lesser stringent standards that were being imposed in these countries in comparison to the proponent countries. For example, if the number of notifications is taken as a simplified measure of stringency. Then the total number of SPS and TBT measures notified by eight proponent countries is 8,151 notifications, while the rest of WTO membership (152) notified 16,800 notification in the EGs category. Therefore, the average notifications per proponent countries is 10 time higher when compared to non-proponent countries. It further indicates toward a creation of global supply chain in the EGs sector; with India becoming a part of the whole supply chain integration. This is evident from the manner in which the intermediary goods imports is increasing from developed countries, thus creating a trade deficit with nearly all the proponent countries. Further, the assembled products are exported to diverse set of countries both developed and developing countries (classic examples are the solar and wind energy products etc.). In final analysis, the observation show that at least six sectors were indicated to have an indirect consequence of the EGs liberalisation, as the HS tariff lines are spread across these sectors. These sectors are, Bicycle and related parts; Forest products; Automotive and related parts; Electronics/electrical products; Industrial machinery and Enhanced healthcare. Of these two sectors are in which mandatory participation by India was sort by some of the proponent countries. Therefore, it is critical for India to fully understand the implications of EGs Plurilateral liberalisation as it may be making binding committing like the ITA-I Plurilateral Agreement of 1997.
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Papers by Prof. Murali Kallummal
The AIFTA liberalized tariffs across 80 per cent of AIFTA tariff lines. However, there was no clear measure to discipline NTMs. By stating that the parties shall not institute or maintain any NTM on the importation of goods from the other Parties or on the exportation or sale for export of goods destined for the territory of the other Parties, except in accordance with its WTO rights and obligations or other provisions in this Agreement.
The AIFTA lost control over the NTM side of market access. Therefore, the additional preferential market access provided by the tariffs liberalization seems to be nullified by the presence of NTMs.
Some interesting facts about the role of NTMs which have come to light from the analysis is that, although AIFTA has come up with considerable tariff reduction, at the same time it is equally important for such agreements to come to an understanding on the issue of NTMs. This is critical because of the nature of its impact on a product or group of products, whereby these measures have the possibility of totally denying market access. Therefore, there is a growing urgency for negotiations and immediate solution on this issue, by creating and strengthening the discipline around the mutual recognition agreements (MRAs), while dealing with the SPS and TBT measures.
Presently, there is discord in the tariff lines. There is a need to harmonize the tariff schedules of two parties to the agreement. This is important in the context of ASEAN moving towards a common tariff by 2015. However, a majority of ASEAN members have different scheduling under the AIFTA.
This in itself is very challenging and to add to this is how the measure is applied at the border.
Sometime, it may lead to discrimination due to lack of transparency built-in to the procedures of allocation of domestic regulation.
Finally, there is a need to built-in some sectoral MRAs. This is important especially when it is found that a lot of TBT measures are based on national standards. This would help countries to protect the industries within the FTA. India and ASEAN may undertake sectoral MRAs in those areas, which offer higher marginal return from the trade liberalization. Intuitively, MRAs would lead to strengthening production networks across borders.
The AIFTA lost control over the NTM side of market access. Therefore, the additional preferential market access provided by the tariffs liberalization seems to be nullified by the presence of NTMs. Some interesting facts about the role of NTMs which have come to light from the analysis is that, although AIFTA has come up with considerable tariff reduction, at the same time it is equally important for such agreements to come to an understanding on the issue of NTMs. This is critical because of the nature of its impact on a product or group of products, whereby these measures have the possibility of totally denying market access. Therefore, there is a growing urgency for negotiations and immediate solution on this issue, by creating and strengthening the discipline around the mutual recognition agreements (MRAs), while dealing with the SPS and TBT measures.
Presently, there is discord in the tariff lines. There is a need to harmonize the tariff schedules of two parties to the agreement. This is important in the context of ASEAN moving towards a common tariff by 2015. However, a majority of ASEAN members have different scheduling under the AIFTA. This in itself is very challenging and to add to this is how the measure is applied at the border. Sometime, it may lead to discrimination due to lack of transparency built-in to the procedures of allocation of domestic regulation.
Finally, there is a need to build-in some sectoral MRAs. This is important especially when it is found that a lot of TBT measures are based on national standards. This would help countries to protect the industries within the FTA. India and ASEAN may undertake sectoral MRAs in those areas, which offer higher marginal return from the trade liberalization. Intuitively, MRAs would lead to strengthening production networks across borders.
One such initiative has been the private/voluntary sustainability standards (P/VSS). The example is of a pressure cooker wherein the ‘value’ is private sustainability standards. There would be little interest in the more significant globally on sustainability issues which is more of a public good when the private sectors are actively driving the global processes. Therefore, the likely impacts need to be analysed in detail. Tthis section is the part two of the draft report “Emergence of Private Sustainability Standards: Concerns and Challenges for India’s Exports and Domestic Industries”. Chapter two of part one of the Report addresses the trend and usage of the VS/ PSS in India. It further highlights the challenges in doing so owing to lack of clear distinction - given the lack of consensus-based definition of VS/ PSS. Some private standards have evolved to become the private sustainability standards. Globally the voluntary/ private standards numbered are 624, with minimal number graduated to become truly PSS. Secondly, it traces the origin of the understanding of all existing VS/ PSS to United Nations Conference on the Human Environment (1972). In this context, inter-ministerial coordination between finance, labour, health, environment and commerce could help Indian industries – by way of active participation in standards-setting processes and adoption of more regional standards. There are no agencies assigned formally by the Department of Commerce (DoC) for record of VS/ PSS present and operating in India. Given its importance for international trade for India, there is an urgent need to keep a record of all VS and PSS. These would help in the impact analysis of the domestic adoption in the context of exports and coordination of value chains.
We have analysed the non-tariff measures (NTMs) like SPS and TBT measures, from the year 1995 to 2017 based on Centre for WTO Studies’ databases on SPS and TBT (http://wtocentre.iift.ac.in/DB/sps/, http://wtocentre.iift.ac.in/DB/tbt/). For the analysis, we have taken the notifications notified to the WTO by RCEP members, it does not include Revision, Addendum, Corrigendum and Supplement. We have tried to compare India’s NTMs with other RCEP members’ NTMs, so Rest of RCEP members are excluding India.
Free trade agreements are meant to be promoting mutual trade among all members benefitting all the parties to the trade negotiations and should be achieve to generate complementarities. The key payers being the ASEAN 10 countries and the countries like India, China, South Korea, Japan, New Zealand and Australia.. India’s trade seems to get adversely affected by RCEP owing to the expected surge in imports into India with a limited market access for Indian export. It is evident from the increased use of non-tariff measures by the other RCEP partners.
To achieve balanced negotiated outcomes the RCEP negotiations should ideally consider both the elements of market access – the tariff the non-tariff measures. In this paper, we have analysed in detail based on the online databases on SPS and TBT by the CWS, which is available on the web. The impact of non-tariff measures, like the SPS and TBT measures, have been assessed based on the occurrences of these barriers on products and countries that impose such a measure.
Contrary to developed to developed countries FTAs, the RCEP (mega FTA) is being modelled along the all the other developing country FTAs, which are heavily fixated on tariff liberalisation alone. Therefore, effective market access does not picture from the point of view of behind the border measures like the SPS and TBT compliance issues. The negotiations on tariff are only the first step of any FTAs, but core to market access lie in harmonising the non-tariff measures and therefore to bring them at equal footing along with tariffs under the RTAs- similar to the efforts carried out under the customs unions.
Ideally, the efforts should go beyond the borders where tariff are applied and move towards harmonisation of domestic regulations. Which is not advisable in all situations and may not be possible practically, therefore India should have legal recourse to ensure that its exports to RCEP has near complete market access in preferential tariffs. Mutual Recognition agreements (MRAs) of accepting each other certificates is only the short-terms solution and sometime difficult to achieve when economic status of the parties are different but this is the only short-terms solution for both parties benefit under an FTA. If such a scenario is not possible then the way forward challenging. In the recent years use of non-tariff measures like SPS and TBT and issues of compliance has increased on a day-to-day basis. The other solution to build in mechanisms to notify the partner about the status of imported goods of each other, this can be then reveal the true market access of goods under the preferential regime.
This has led to members stretching the use of permissible provisions (Articles 5 and 7) under the sanitary and phytosanitary (SPS) agreement, allowing for deviation from international standards and not notifying with HS codes. All these actions particularly over the last two decades have increased the level of protection of their domestic industry under pressure from tariff liberalisation and correspondingly led to a rise in protectionism. Especially, when the restrictions on trade are put they are not adequately notified to the WTO. Information asymmetry (of various forms like – the WTO notifications without trade linkage, non-standardised approach to market access, non-codex MRL standards etc.,) is one of the biggest challenges to overcome, when it comes to addressing the menace of non-tariff measure created particularly by the SPS and TBT measures.
This paper attempts to bring to the forefront some of the imbalances in global trading arena that have co-existed along with the WTO led tariff alone liberalisation efforts since 1995. To do this we have analysed 10 players in the global arena considering various strategic consideration for India. In the paper, we have attempted to bridge this by providing exactly what is the level of requirements across 10 countries in terms of active ingredients MRL standards. To elaborate this issue, we have done a mapping of maximum residual limits (MRL) standards on active ingredients as provided by the Global MRL Database for 10 countries alongside Codex standards (international). An analysis on the stringency is performed to quantify a comparison MRL standards scenario vis-à-vis the Codex standards for 10 countries.
The paper highlights the growing importance of MRL standards on active ingredients in determining global players in agricultural exports. This paper also analyses the MRL standards faced by top 33 agricultural products of India in nine markets. Further, there is an attempt to analyse the interface of tariff liberalisation (MFN) with MRL-based SPS standards, which are dominantly present “behind the border”.
In this context, report finds the losses and challenges that India’s exporter may face under the newly proposed EC legislations, notified to the SPS and TBT committees of the WTO, putting restrictions and limitations on the use of chemicals and some non-chemicals that have properties of endocrine disruptions.
European Commission notified three separate notifications, one under the SPS committee and two under TBT committee of the WTO.
Highest impact on India’s export is seen in the segregation of ‘biocidal products’, which recorded US$ 37.5 billion with a share of 89 percent of India’s total exports. This is followed by the segregation of ‘chemicals as endocrine disruptors’ with US$ 2.8 billion and share of 6 percent and the last segregation is the product list of ‘plant protection products’ with US$ 2 billion at a share of 5 percent of the India's export.
To summarise, there are evidences of higher shares of total Indian exports to EU-27 countries at 74 percent when compared to its exports to global at 62 percent shares. It suggests that India's exports to EU-27 is more vulnerable when it comes to its exports to World; under the proposed legislation on endocrine disruptors.
This paper analyses India’s exports to, and imports from, the four bilateral partners like Brazil, Russian Federation, China and South Africa (BRCS). The complete analysis carried out for the period 2007 to 2012. At the aggregate level, India had an overall negative trade balance with the BRCS trading partners. Reflected in India’s negative trade balance with China, Russia Federation and South Africa. The only country with which if enjoyed a trade surplus is with Brazil.
Using the UNCTAD has classified the products into two broad categories i.e., Primary Products and Value Added Products. In 2012, the product count in resource intensive products has 31 percent share with 10 percent share in value of exports. The high skill- & technology intensive manufactures had 24 percent share in terms of product count while it had only 19 percent share in value of exports. Medium skill- & technology intensive manufactures had 21 percent share of tariff lines but accounted for 9.7 shares in terms of value of exports. Similarly, skill- & technology intensive manufactures accounted for nearly 12 percent share in tariff lines, but in terms of value, it accounted only 3.7 percent share. Overall, the category of Primary Products (PP), which includes the non-fuel primary commodities and mineral fuels accounted for 12.4 percent share of the total tariff lines and 58 percent share of the value of exports from India. The dominant country (based on top 20 imports) for imports by India from among the BRCS partner’s countries has been China, followed by South Africa, Brazil and Russian Federation.
An analysis was undertaken to identify India's exports in three categories - value added exports in which exports potential is not fully exploited; products which have a high export potential across BRCS countries; and products with export potential in the BRCS partners but India does not have the supply capacities. The general composition of products in the three categories to the BRCS countries showed considerable similarities, South Africa showed some crucial difference with the dominance of export potential items realised by India’s exports having the highest number 352 products almost 42 percent share of total India’s VA exports – the highest share across the BRCS partner countries observed under this scenario. Under the first category of “export potential realised by Indian exports” only 23 products found to be common across BRCS countries accounting for 11 percent of the 222 products. While in the case of second category, “India's export capacity not fully exploited” nearly 83 percent of products found to be common to 3 to 4 countries of BRCS partners. Similarly, in the last category of “existing market in partner with India facing Supply Constraint” close to 84 percent of products were common to 3 or 4 countries.
The tariff across countries have been converging by 2012, within a range of 7 to 15 percent, the extent of usage of non-tariff measures that needs to be scrutinised. India had a much lower WTO notified restrictions in terms of Sanitary and Phytosanitary Measures (SPS) when compared with its Technical Barriers to Trade (TBT) measures.
Recommendations
1 India having export capacity but not fully exploited category had nearly 50 percent share of the total Indian exports to BRCS. There is an urgent need for revamping the production structures in those tariff lines that identified to have the potential for exports but was not been fully exploited. One reason could be the prevalence of behind the border measures and regulations in the importing partners. This needs to be addressed by forging mutual recognition of standards, testing procedures, conformity assessment and accreditation of testing laboratories.
2 Primary product (PP) has a higher share in India's export basket to BRCS when compared to value added (VA) products. Special initiatives are required to promote value added exports from India to BRCS.