WTO Bound Rates

At the Uruguay Round (UR) committed to bind tariff lines for 62 per cent of its industrial products. In the pre-UR era (i.e. before 1995), the binding was applicable for only 3 per cent of lines. These tariff commitments were supposed to reduce India’s trade-weighted average tariff from 71.4 per cent to 32.4 per cent. The share of bound items was to go up to 68 per cent in the post-UR era.

Further, at the UR, India committed its mineral and basic products at 25 per cent and manufactures at 40 per cent, while consumer goods were not bound. Most agri products were not bound along with sensitive products like edible oil, petroleum products. India kept its promise and brought the duties down to the promised level on the due date of year 2000. The liberalization programme has continued thereafter, today the peak rate is just 10 percent and the average rate and lowest rate is well below the peak.

In 1999 India started renegotiations under Article XXVIII of GATT in a number of items which were bound before the UR negotiations at zero. Prominent items included milk powder, wheat and rice which were all bound at zero. Initial negotiations with the US yielded result, the tariffs on these were raised with return concessions on other items like maize, milk powder, fruit juices, raisins and almonds in the form of tariff rate quotas at low duties or low duties in the schedule rate itself.

India has notified bound rates for Textiles and IT Agreement goods in addition to the bindings in the Uruguay Round of Negotiations concluded in January 1995. The items not under binding commitment and those already bound are subject to NAMA (Non Agriculture Market Access) negotiations under the Doha round at WTO. This round is yet to be concluded.

The actual tariff rates in India are well below the bound rates with tariff peaks at 10 percent except for agriculture goods. Tariff peaks for sensitive goods like bicycles and motor cars are being tested since NAMA negotiations are in doldrums. – (Editor – 17.03.2012)