India Signed the GATT Agreement: What Does It Mean for Trade and Economy?
The General Agreement on Tariffs and Trade (GATT) is a multilateral trading system that aims to promote free and fair trade among its member countries. India became a signatory to the GATT agreement on April 15, 1994, after several years of negotiations.
The signing of the GATT agreement was a significant milestone for India as it opened up new avenues for international trade and investment. The agreement set rules and regulations for trade between member countries, which helped to reduce trade barriers and increase cross-border trade.
India`s accession to the GATT agreement signaled a shift towards a more open and liberalized trade regime. The country was previously known for its protectionist policies, which made it difficult for foreign companies to do business in India. However, by signing the GATT agreement, India committed to reducing trade barriers such as tariffs and quotas, and opening up its markets to foreign competition.
The GATT agreement also provided a framework for resolving trade disputes between member countries. This was particularly important for India, which had several ongoing trade disputes with other countries at the time. Under the GATT agreement, member countries could bring their trade disputes to the World Trade Organization (WTO), which would act as a mediator and facilitate negotiations between the parties involved.
Since signing the GATT agreement, India has made significant progress in liberalizing its economy and opening up to foreign investment. The country has implemented several reforms aimed at improving its business environment and attracting foreign investors. These reforms have included measures to simplify regulations, improve infrastructure, and reduce red tape.
India`s accession to the GATT agreement has also had a positive impact on the country`s trade and economy. According to the WTO, India`s merchandise exports increased from $18.6 billion in 1994 to $313.6 billion in 2019. India`s services exports also increased from $17.9 billion in 1995 to $214.1 billion in 2019.
The signing of the GATT agreement also helped to boost foreign investment in India. The country has attracted significant foreign direct investment (FDI) since the 1990s, with FDI inflows increasing from $129 million in 1991 to $74.4 billion in 2019. The increase in FDI has helped to create jobs, improve incomes, and boost the country`s economic growth.
In conclusion, India`s accession to the GATT agreement was a significant milestone for the country`s trade and economy. The agreement helped to open up new avenues for international trade and investment and signaled a shift towards a more liberalized trade regime. Since signing the agreement, India has made significant progress in improving its business environment and attracting foreign investment. The GATT agreement remains an important framework for promoting free and fair trade among its member countries, and India`s participation in this system has been critical to its economic development over the past few decades.