India's agricultural exports in the post Uruguay round set-up

The Unaguay Round was the most complicated round of multilateral trade negotiations ever held. Apart from the rules of GATT and new areas like trade-related intellectual property rights, trade related investment measures and services, the Uruguay Round also discussed market access. Although market access has traditionally been a part of GATT negotiations, two sectors were discussed for the first time in market access negotiations. These were agriculture, and texnles and garments. Both of these are areas where India has considerable export interest. Now that the final shape of the Uruguay Round liberalisation is known, various studies have been made to estimate the gains to world trade as a result of the liberalisation that will follow. While discussing its impact on market access, most studies highlight the gains from liberalisation in textiles and garments and agriculture.

The agricultural agreement involves border measures as well a reductions in domestic support. As a result of both of these, global prices are likely to rise and at the same time, a decrease in global output for various agricultural products is forecasted. India's agricultural exports are already price competitive and should become more so as a result of these changes. But can India benefit from this potential gain? This study, conducted by the National Council of Applied Economic Research for the Ministry of Commerce, examines the impact of the Uruguay Round agreement on India's agricultural exports. In addition to market access, the study also discusses intellectual property protection for plants and seeds and sanitary and phytosanitary measures. On market access, the conclusions of the study are essentially negative. It is argued that the liberalisation represents a demand-side change. But India's agricultural exports are fundamentally supply-constrained. When quantifying the likely gains to India as a result of the liberalisation, the study thus highlights the reforms necessary in the domestic agricultural economy if India is to gain from the liberalisation.