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The full form of the WTO is the World Trade Organization, and its function is to control and maintain trade across the world. Generally, this organisation makes the rules for trading between countries. At present, 159 countries are members of the WTO. It ensures that trade between the nations runs smoothly and peacefully and is profitable for both countries.
As everything has advantages and disadvantages, the WTO also has good and harmful effects on India, and we will study both.
The WTO is related to the term globalisation, and many such terms are directly connected to it. So, take a look at some essential terms used in this article.
Some important terms
- Globalisation: It is the process of exchange of goods, services, human resources, etc., between the world’s nations.
- Economy: An economy is a set of interrelated production and exchange activities.
- Finance: It is a process of managing the funds or money for any expenditure.
- Trade: Trade is a particular type of business that deals with the exchange of, i.e., the buying and selling of goods and services, between peoples or countries.
- GDP: GDP stands for “Gross Domestic Product”. It is the value of the total product produced or created in a country.
- Currency: It is the mode of exchange of goods.
The WTO and its role
The World Trade Organization is an international organisation that was established on 1 January 1995 to help its members uplift their living standards, create employment, and improve people’s lives by using trade. It forms the rules and regulations regarding trading across the nations and ensures that the rules are correctly followed to avoid any kind of harm and violence.
The primary role of the WTO is as follows:
- WTO trade agreement administration.
- Providing a trade negotiation forum.
- Resolving trade disputes.
- Monitoring national trade policies.
- Helping technical support and training to developing countries.
- It allows open communication between its members regarding trade.
Effect of the WTO on India
Trading is an excellent weapon for any developing country, and one who uses it rightly wins prosperity and wealth for their country. India, as a developing nation, does the same. India is an agricultural country, and most of its GDP depends upon agriculture, as it exports agrarian products across the world. Trading can play a huge role in developing any nation, if adequately used, because it also has harmful impacts. So, let’s take a look at the good and bad impacts of the WTO on India.
Positive impacts of the WTO on India
India is a developing country and has a vast geographical area and population. That’s why it needs more capital to feed its citizens. India is good in agriculture, as its geographical condition is very good for crops, so they are self-sufficient in feeding their people and exporting edible products, but some things are imported. So, it has a perfect balance of imports and exports, and India, as one of the founding members of the WTO, has a very positive impact on it. There are some points listed below that helped in the development of India through the World Trade Organization:
- India’s export competitiveness has been improved by the WTO.
- The lower tariff has helped integrate with the global economy more efficiently.
- India’s growth and development have been pursued by transferring and exchanging technology and ideas.
- There is a reduction in cost and time due to market access.
- The WTO helped better settle trade disputes in a well-defined and structured manner.
Negative impacts of the WTO on India
Every positive impact carries a negative with it. Even after so many positive things, the WTO has also harmed India in some ways, which are listed below:
- The TRIPs agreement went against the Indian Patents Act (1970).
- The introduction of product patents in India by MNCs caused a hike in drug prices, which left no generic option for the poor.
- India and its research institutions have been negatively affected by the extension of intellectual property rights to agriculture.
- The MFN (most favoured nations )clause proved detrimental to India’s interests and provided grounds for the Chinese invasion of the Indian market through dumping.
- India’s service sectors are backward compared to those in developed countries.
Conclusion
The World Trade Organization is an international organisation that deals with the rules and regulations of trading worldwide. Currently, it has a total of 159 countries, including India. India has been the founding member of this organisation since 1995. This organisation has helped many countries to develop with the help of trade. It also helped India and still does toward making it a developed country. Trading has a significant impact on any nation’s economy, and it is a part of globalisation. It also has negative impacts, but they are overshadowed by the positive impacts. So, for India, the WTO seems like a life-uplifting organisation.
