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QR Removal and Its Probable Implications
India has quite unnecessarily agreed to remove its quantitative restrictions. It had a good case and might have persuaded WTO to reject the US demand in the matter. QRs are important because developed country firms, suffering from overcapacity, may bring the recession in their own markets into India.
For the developed countries, making and breaking global rules seems to have become a common strategy to force developing nations into the liberalisation process. The recent WTO directive forcing the Indian government to eliminate import barriers from several of its key sectors by April 2001 has only brought it to sharper focus than ever before. What, however, makes it a matter of grave concern is the manner in which the Indian government signed off its right to even decide the pace of its economy’s liberalisation, in spite of having an iron-clad case.
To begin with, the directive has come at a time when the Indian government has maintained, especially over past five years, a relatively good record in promoting trade liberalisation in several ways, one of them being regularly pruning its list of imports as per the WTO rules. Further, the Indian government has been quite in line with its commitments to the WTO.
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