Moreover, the ongoing negotiations in the Doha Round are likely to yield enough flexibility in product choice and tariff selection. A multilateral trading system is in India’s interests, given it has no clear fit in any regional association. Therefore, India should work towards the success of the Doha Round and in the meantime, make use of the opportunity to reform its domestic markets to introduce more efficiency.

The interests of India are at variance with those of least developed countries (LDCs), which became amply clear during the Tokyo and Doha Ministerial level meetings, when the latter isolated India. Many of these countries are net importers of food, and subsidies in the exporting countries put them at an advantage. Moreover, under the Everything But Arms (EBA) initiative of the European Union, the LDCs enjoy quotas and duty-free access to the EU market for most goods – a facility that was never available to India.

Growth in both the services sector and industry are critical to India’s economy. With favourable bound rates for agriculture onboard, the negotiating framework of India must be de-linked from that of other developing countries. The situation is critical for India, particularly in view of the fact that developed countries have managed to link agricultural subsidies with market access in services and industry. If the European Union needs to do more on agricultural tariffs, and the US needs to do more on reducing agricultural subsidies, then the G-20 group of countries, of which India is a key member, also needs to do more on industrial tariffs. This is a hard ball game.

Moreover, all these issues are dynamically linked to the future agenda of the WTO: inter-alia in terms of substantial opening up of trade in services; rules governing transparency in bilateral trade agreements, anti-dumping and subsidies; trade facilitation; trade and environment; WTO agreement on Intellectual Property Rights (TRIPS), Convention on Bio-Diversity (CBD) and extensions to geographical indication protection (GIs); and Dispute Settlement and Aid for Trade.

Traditionally, India has fallen prey to group dynamics because its interests do not fully conform to the LDCs, whose cause it used to champion; but nor do they radically differ from those of developed countries, which it confronts. Therefore, the time has come for India to abandon its position of ambiguity and take a rational step in the negotiation process in order to harness its own best interests. Some sacrifices are worth taking in order to gain a wider market. It appears that the new government has understood this reality.

This article originally appeared here on South Asia Masala.