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WTO regime will throw up new challenges for India: Kaul

Former Indian Ambassador to USA P K Kaul said that under the new regime of WTO, any attempt to derive unfair bargain would be short-lived and would not promote long-term relationship with the US.

Delivering the 'Lincoln Memorial Lecture' at the Indo-US Business Convention -- 'The Gujarat perspective 2001' -- in Ahmedabad, Kaul said that collectively there was need for introspection on the part of each party to see how previous wrongs and mistakes were to be corrected and avoided.

He said that in the new WTO environment, the buzz words would be efficiency and productivity. "Success will lie with those who exhibit competitiveness in price and quality."

Wasteful labour practices, inefficient production technology, cumbersome trading methods and compare themselves with the best in the world.

Though India has the 13th largest gross domestic product country in the world, it lacks competitiveness.

He said that from 1990-98, the Indian GDP grew at an annual rate of 6.1 per cent. With a global average of 2.4 per cent, this was among the highest in the world.

India has the world's largest irrigated area and the world's largest producer of tea, butter and ghee, the second largest producer of rice, wheat, milk and sugar, and the world's third largest producer of tobacco.

India accounts for 21.7 per cent of the world's output of rice, 11.2 per cent for wheat and 14.9 per cent for cotton (lint). India is fourth in the production of tractors.

He said that there were 5,860 listed companies in India, compared to only 853 in China. FDI inflows into India are $2.3 billion in 1998, down from $3.3 billion in 1997, but up from the average of $0.6 billion for 1987-92.

Kaul said that with a per capita income of $430, India is ranked 165th in the world. The world average per capita income is $4,890. Purchasing power parity calculations increase India's per capita income to $1,700, but this increases the rank to only 163. The world average per capita income in PPP terms is $6,200.

India is ranked 132nd in the world, according to the UNDP's human development index. For rice, India's yield is 20.9 kilos per hectare. The United States produces 63.5 kilos, Japan 62.2 kilos and China 60.6 kilos. For wheat, India's yield is 25.8 kilos per hectare. The United Kingdom produces 75.6 kilos, France 76.0 kilos and China 36.7 kilos.

Kaul said that India's exports of $44 billion of goods and services make it only the 31st largest exporter in the world.

India's exports of $33.2 billion of goods compare with china's $183.8 billion, Hong Kong's $174.1 billion, South Korea's $133.2 billion, Mexico's $117.5 billion, Singapore's $109.9 billion and Thailand's $53.6 billion.

He said that India's export share in the world is 0.7 per cent. This is low by global standards and has also come down over the years, reflecting erosion in competitiveness. India's major export categories include textiles and garments, leather and manufactures, chemicals and pharmaceuticals, gems and jewellery, jute and manufactures and engineering goods.

Barring rice, spices, tea and gems and jewellery, in none of these sectors is India's share of the world market sufficiently high. Even textile and garments had failed to be the engine of export growth that it has proved to be in East Asia.

UNI

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