GENERAL AGREEMENT ON RESTRICTED
, . . « . . — , * « * i r N - r „ . ^ ^ Spec(82)6/Add.2/SuppL.1 TARIFFS AND TRADE 23 August 1983
Original: English
WORKING PARTY ON STRUCTURAL ADJUSTMENT AND TRADE POLICY
Exchange of Information on the Experience of all Contracting Parties with Regard to
Structural Adjustment
Supplement
Reproduced in the Annex to this document is a supplementary submission by India.
83-1620
Spec(82)6/Add.2/Supp1.1 Page 2
WORKING PARTY ON STRUCTURAL ADJUSTMENT AND TRADE POLICY
INDIA - SUPPLEMENTARY SUBMISSION
I
"Some preliminary reflections on India's
experience with structural adjustment and trade
policy" were submitted to the Working Party in
February 1982. This was followed by an oral
presentation on 29 March 1983. This supplementary
submission is being* presented with a view to
amplifying some of the indicators of changes of a
structural nature in India's economy.
n
The Indian delegation has consistently
maintained that given the agreed objectives and
nature of the Working Party (annex to L/5120), the
Working Party should identify the relationship
between structural adjustment and trade policy
measures in the context of the objectives of the
GATT, including Part IV and in particular Article
XXXVII 3(b).
2. India has also maintained that in so far
as developing countries are concerned, it appeared
that adjustment was an integral part of the overall
process of the development of the economy as a whole
and as such different from structural adjustment in
the industrialised countries where the focus should
be on resources being allocated in accordance with
the competivity of various sectors of the economy.
As such, for developing countries in general, it
would be inappropriate to look for adjustments
between one sector and another since the accent
Spec(82)6/Add.2/Suppl.1 Page 3
would have to be on the rapid development of a l l sec tors for which an appropr ia te developmental environment i s required to be c rea ted .
I l l
Without prejudice to our basic contention
that the Working Party should in its deliberations
focus primarily on the process of adjustment, or
the lack of it, in the developed economies, enclosed
are the following tables:
Table - 1 : Selected Economic Indicators
Table - 2 : Agricultural Production
Table - 3 : Production of Selected Industries
Table - 4 : Latest Trends in the Performance of Infrastructure Sectors
Table - 5 : India's Exports by Major Commodity Groups
Table - 6 : India's Imports by Major Commodity Groups
Table - 7 : Direction of Trade
The above are also indexed in pictographic
form.
2. Perusal of the above economic indicators would
indicate the significant changes that have taken place
in all sectors of the Indian economy — industry,
agriculture, infrastructural development and inter
national trade. Descriptive details were provided at
the time of the oral presentation. These significant
changes are the result of the process of development
ushered through an era of planned development which
aims at securing growth with social justice.
3. India's Gross National Product has increased,
except in 1979-80, at a steady pace reaching a rate
of growth of 9.67. in 1975-76 and 5.2% in 1981-82.
Spec(82)6/Add.2/Supp1.1 Fage 4
Production levels in agriculture and industry have
also increased attendant with this overall growth.
The highlight of this has been the very perceptible
modernisation in the sectors of industry and
agriculture resulting partly from the induction of
appropriate modern technology.
4. This regime of sustained growth in all
sectors has been realised with relative stability on
the prices front. Between 1971 to 1982 the share of
various sectors to the National Product has changed
with the share of agriculture and primary activity
declining from 49.5% to 41.8%: manufactures
increasing from 20.1% to 21.2% and certain infra-
structural activity, including, inter alia, transport,
communication, banking, insurance, real estate and
business services, from 21.3% to 24.1%. Within these
structural changes there have been significant
developments and internal changes.
5. Perusal of the attached data on India's
international trade will show that India has a trade
deficit with nearly all the industrialised countries
of the world individually and collectively. Despite
this adverse trade balance, India has been undertaking
a very significant degree of autonomous liberalisation
in its import regime. This cannot be maintained unless
the visible protectionism in the markets of the
developed countries against exports of developing
countries, such as India, is eased.
6. Whilst tariff barriers in the developed
countries have certainly come down as a result of
successful rounds of trade negotiations in the GATT,
the use of non-tariff barriers continues and some new
forms have arisen. Primary amongst these are the
use of ostensible legal instruments such as counter
vailing and anti-dumping duties which are applied in
Spec(82)6/Add.2/SuppL.1 Page 5
a discriminatory and protective manner against the
legitimate export interests of developing countries.
It has been the experience of developing countries
that the very commencement of an investigation
invariably has had a trade disruptive effect. Apart
from the fact that experience has shown that
investigations in anti-dumping and countervailing
duty cases are launched at the slightest excuse and
without even an attempt to substantiate the allegations
by complainants in importing countries, such investi
gations are then terminated after very long and
cumbersome procedures when a verdict of no injury or
no dumping/subsidy is registered. Meanwhile, the
small exporting firms in the developing country would
invariably have gone out of business. There have also
been innumerable instances of other ostensibly legal
instruments or rules being used against the legitimate
trading interests of developing countries in a highly
discriminatory and protectionist manner.
JCV
After the Working Party has considered the
various national submissions, it would be useful to
make an assessment of the extent of adjustment that
has taken place in the developed economies, the nature
and extent of positive adjustment measures taken by
the governments in those economies and then to assess
the extent to which the adjustment process has
contributed to the liberalisation of trade. If the
Working Party can identify the key sectors where the
impact of structural adjustment has been felt or was
likely to be felt in the near future — sectors where,
for instance, there was clear evidence of rigidities
and protective measures had been repeatedly taken and
Spec(82)6/Add.2/SuppL.1 Page 6
intensified, clear possibilities could emerge of
sectors where the developed countries had lost
comparative advantage and where both the importing
and exporting countries could fruitfully consider
transfering production lines in a gradual and
phased out manner to those countries which clearly
enjoyed the comparative advantage or where the
possibility of long range dynamic comparative
advantage clearly existed. Developed countries might,
of course, also like to consider those sectors where
there had been a high growth rate of imports which
threatened the equilibrium. In addition, other
relevant questions related to the inherent flexibility
in these economies to identify and overcome the
rigidities including problems relating to mobility of
labour, fiscal and monetary policies, intended to
assess how these had been used as instruments of
government policy to tackle these rigidities.
2. We firmly believe that it is the task of the
Working Party to attempt an overall assessment along
the lines indicated above and in keeping with its
original terms of reference. An attempt to provide
statistical data either to justify increasing
protectionism by developed countries and problem
sectors or to seek reciprocity from developing
countries would only serve to undermine the philosophy
and work of this exercise in the GATT.
TABLE - I
Selected Economic Indicators
1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 (Percentage change over previous year)
1981-82 1982-83
8 10
Gross National Product at 1970-71 prices
Agricultural production
Foodgrains production
Industrial production
Electricity generated*
Wholesale prices (on point to point basis)
Monetary resources (M3)
Imports (at current prices)
Exports (at current prices)
Foreign exchange assets (excluding gold and SDRs)
1.2
-3 .2
-4 .6
3.2
5.2
10.1 10.9
52.9
31.9
9.6
15.2
21.2 7.2
12.9
-6 .5
15.0
16.5 21.4
0.8
- 7 . 0
- 8 . 1 9 .6
11.5
12.0 23.6
-3 .6 27.2
8.9 14.5
13.7 3.2
3.4
0 . 3
18.4
18.7 5.2
5.7
3 .4
4 . 3
7.6
12.2
4 . 6
21.9 13.2
5.9
-4 .8 -15.5
-17 .1 -1 .4
2 . 1
21.4
17.7 32.4
12.8
8.0 15.3
18.1 5.6
5.9
16.7
17.6
38.8
3.9
5.2
5 .5
2 .7
8 .6
10.1
2 .4
12.3
8.9
16.2
5.2 144.3 91.9 57.2 16.0 -1.1 -6.6 -30.4
1
2
3*
4* <
5
6*
i 8
Quick estimates.
Anticipated.
April-November 1982 over the same period in 1981
April-December 1982 over the same period in 1981
March 28, 1982 - January 15, 1983.
As on January 14, 1983 over March 3 1 , 1982.
Provis ional f igures for April-October 1982 over the same period in 1981.
As on January 31 , 1983 compared with January 31 , 1982. E l e c t r i c i t y generat ion r e f e r s to u t i l i t i e s only.
2.0 '
- 3 . 0 '
- 4 . 0 ;
4.0-
7.2<
2.8-
14.2 l
16.l"
17.8
4.3 8
m to to o ->JCO
TABLE - 2
Agricultural Production
(Million tonnes/bales*)
TJ CO ai v>
IQ <T> (D o 00 00
f \ )
O
3> Q. CL
CO C
Crop T>
1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1 9 8 1 - 8 2 -
8 9 10 11
Foodgrains
0ilseeds(5 major)
Sugarcane(gur)
Cotton (Lint)*
Jute & Mesta*
Potato
97.03
6.86
12.76
5.74
6.09
4.45
104.67
8.85
14.43
6.31
7.68
4.86
99.83
8.53
14.72
7.16
5.83
6.23
121.03
9.91
14.41
5.95
5.91
7.31
111.17
7.83
15.85
5.84
7.10
7.17
126.41
9.00
17.96
7.24
7.15
8.14
131.90
9.35
15.73
7.96
8.33
10.13
109.70
7.86
13.09
7.65
7.96
8.33
129.59
8.08
15.77
7.01
8.16
9.67
133.06
10.90
18.73
7.83
8.40
9.94(P
*170 kgs. each for cotton and 180 kgs. each for jute and mesta.
^ ">
TABLE - 3
tToduction of Selected Industr iel
SI. No.
Industry Unit 1970/71 1981/82
I. MINING
1. Coal
2. Petroleum
II. METALLURGICAL INDUSTRIES
3. Finished Steel
4. Aluminium
III. MECHANICAL ENGG. INDUSTRIES
5. Machine Tools
6. Cotton Textile Machinery
7. Railway Wagons
IV. ELECTRICAL ENGG. INDUSTRIES 8* Power Transformers
9. Radio Receivers
V. CHEMICAL INDUSTRIES
10. Nitrogenous Fertilizer
11. Phosphatic Fertilizer
VI. TEXTILE INDUSSTY 12. Jute Textiles 13. Cotton Cloth 14. Man-made fibres
VII. FOOD INDUSTRY 15. Sugar 16. Tea 17• Coffee
VIII. ETECTRICTTv OFNERATION
Mn. Mn.
Mn.
000
Mn. it
000
Mn.
000
000
000
000 Mn.
Mn.
000 Mn. 000
Tonnes Tonnes
Tonnes
Tonnes
Rs.
Nos.
K.v.a.
Nos.
Tonnes
Tonnes
Tonnes Metres
Metres
Tonnes Kgs. Tonnes
Rn Kwh
76.30
6.80
4.81
166.80
430 303
11.1
8.09
1794
830
229
1060 7602
951
3740 423 71.4
55.8
130.80
16.20
7.27
206.80
2499 3111
17.9
21.44
1739
3144
949
1334. 7983
1463
8434 556
136.4
122.0
SpecC
Page
O 00
o-> Q. Q. f\J
in
r—
TABLE - 4
Latest Trends In the Performance of Infrastructure Sectors
"O CO
<Q (D fl» rt - * 00 o ro
Item
A p r i l - D e c * Pe rcen tage change o 3> Q. Q.
Unit 1979-80 1980-81 1981-82* 1981-82 1982-83 1980-81 1981-82 1982-83 ^
1979-80 1980-tii. CO
c 1981-82 E ( A p r i l - r December) ""*
8 10
1. Coal Production . Mn. Tonnes 103.9 114.0 124.9 87.2 90.9 + 9.7 + 9.6 + 4.2
2. Electricity Generated**
(i) Hydel .
(ii) Thermal (incl. Nuclear)
Bn. Kwh
Bn. Kwh
Bn. Kwh
104.6
4 5 . 5
5 9 . 1
110.8
4 6 . 5
64 .3
122.0
4 9 . 6
72 .4
91 .9
38 .0
53 .9
98 .5
38 .3
60 .2
+ 5.9
+ 2 .2
+ 8.8
+ 1 0 . 1
+ 6.7
+12.6
+ 7.2
+ 0.8
+11.7
3. Railways
(i) Revenue Earning Tonnes Originating Millions 193.1 195.9 221.2
(ii) Average Daily Coal Loading on Railways (in terms of
- 4 wheelers) Wagons/day 8832 8987 10207
160.7 166.4
9908 10742
+ 1.5
+ 1.8
+12.9
+13.6
+ 3.5
+ 8.4
4. Cargo Handled at Million Major Ports Tonnes
78.49 81 .32 8 7 . 4 1
* Provisional ** Utilities only
62.29 70.06
"
+ 3.6 + 7.5 +12.5
r si. No.
1 .
2 .
3 .
4 .
5 .
6 .
7 .
A.
*
S I .
1 .
2 .
3 .
4 .
Commodity
J u t e Manufactures
Tea
Cot ton F a b r i c s
Lea ther & Lea the r Manufac t u r e s
Eng inee r ing Goods
Chemicals & A l l i e d p r o d u c t s
Cot ton Apparel
H a n d i c r a f t s ( i n c l u d i n g p e a r l s , p r e c i o u s and semip r e c i o u s s t o n e s )
PROVISIONAL
Ho. Commodity
Food & Live an ima l s c h i e f l y for food
Raw m a t e r i a l s & I n t e r m e d i a t e Manufactures
C a p i t a l Goods
Others
T o t a l Impor t s
* PROVISIONAL
• i i w m — — 9 —
I n d i c é s Expor t s By Ma.lor Commodity ^ o u p s
Uni t
000 tonnes
M i l l . Kgs.
Mn. Sq. Mts .
Value
Value
Value
Value
Value
TABLE
1970-71 Qty Value
561 1904
199 1483
443 753
722
1304
294
86
699
- 6
I n d i a ' s Impor t s By Ma.lor Commodity Groups
1970-71
2424
8880
4040
998
16342
** Revised t o Rs.136382 fo r supplementary
1975-76
13954
27636
9677
1385
52652
1976-77 1977-78 1978-79
9374 2145 2361
29032 43947 48737
10794 11 '*84 13061
1538 2626 3984
50738 60202 68143
d a t a r e c e i v e d u p t o Oc t . 1982
(Rs
Qty
410
210
390
(Rs
1979-80
2799
69761
14585
4281
91426
. M i l l i o n )
1 9 8 1 - 8 2 '
• M i l l i o n )
1980-81
3802
97565
19103
4769
125239 ]
Value
2501
3733
2725
3741
8173
3473
5479
10338
1981-82"
NA
NA
17458
NA
L35887
"D CO
0) x>
-» 00
>
** ? ru CO •o •o
TABLE - 7
Direct ion of Trade
1.
2 .
3 .
5 .
6 .
U.S.A.
Canada
EEC
OPEC
East Europe
2073.4
279.6
2796.1
1030.0 3624.3
(Rupees in M i l l i o n ) *
S I . No.
1.
Countries
2
EXPORTS
3
1970-71 IMPORTS
4
EXPORTS
5
1981-82 IMPORTS
6
4529.5
1172.3
3186.7 1258.5 2276.5
8815.9
648.7
15304.6 9270.2
17829.1
14213.4
2938.2
30198.5 38826.2 15248.5
•o co
01 X3
n o - X »
Q. a. — CO c T3
* PROVISIONAL
~- - >
Spec(82)6/Add.2/Suppl.1 Page 13
SELECTED ECONOMIC INDICATORS
MOCr INOUS TRIAL PRODUCTION CCWJOC)
IOO-IOO
I55
• • • i -«a
>—f' > > > ' ' • ' • '
R s . M i l l i o r
70000C
6 5 0 0 C K ^ -
600000--
550OO0t
ACCREGATE MONETARY RESOURCES LAJT MI04T
- i — i — i 1 — T — i — r 1—I—r
l ,Sf: , ,«-»"*
.'' i i i i i i i i i
7100
6100
5100 ~
4100
EXPORTS
À ' ' ' ' >t 1 \ 1 \ 1 \
• 1 1 1 1
1 ! 1 1
\ A » # »
V ^
i
i
i
\ " i
V 1 1 i
WHOLESALE PRICES
i 1—r
J I I I ' ' J L J L
M e r * • o t .
2 9 5
2 6 5
2 7 5
2 0 5
Rs. SCHEDULED COMMERCIAL B A N K CREDIT
LAST miOAT — i — i — i — i — i — i — i — i — i — i — r ~
• - * - » • < -
J I I I I ' ' ' I L
Million 340000
310000
2800CO
250000
IMPORTS
l—r
M M M
13500
11500
• jTUT or f i M N C i I C O H O M C o ivmon.
Spec(82)6/Add.2/Suppl.1 Page 14
Spec(82)6/Add.2/Suppl.1 Page 15
PRODUCTION OF SELECTED INDUSTRIES - 7 _ MltLION I I TONMIS
2 0
«76-77 -78 -79 -BO -SI -62 -63
- 2
1976-77 -78 -7» -60 -61 -62 - 6 3 . 1678-77-7» -7».* -00 -d l - 6 2 -63 T —
HMSmT or f W«MC( ICOMOM< OWIttOM.
Spec(82)6/Add.2/SuppL.1 Page 16
520
480
440
400
360
320
NET NATIONAL PRODUCT (AT ««70-7» PRICES)
NATIONAL INCOME ny m «000 M i l l i o n
»• ~"*̂ i ______
! ! I PER CAPITA INCOME
760
720
680
RUPEES
600
520
480
440
400
360
320
I97I-72 "73 -74 -75 -76 -77 -78 -79 -80 -81 -82
__ x 1 Tr
760
720
680
640
600 1971-72 - . '3 -74 -75 -76 -77 -78 -79 - 8 0 -81 -82
»•» at >—-»«:( , tco-o-.c » . i m
Spec(82)6/Add.2/Supp L.1 Page 17
140
120
FOREIGN TRADE «a. N '000 M i l l i o n
- IMPORTS
CX?ORTS
140
120
100
80
60
40
20
1975-76 -77 -78 -79 -00 62-ao e:-ez
FOREIGN
6o r
EXCHANGE RESERVES PS IN '000 M i l l i o n
J ' i - 7 9 -77 -7» -73 - 6 0 -fll - 6 2
I9e2 -e3
m l K l c» " " A K I , CCO