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26 Conn. J. Int'l L. 415 (2010-2011)
The Three-Pronged Strategy of India's Preferential Trade Policy: A Contribution to the Study of Modern Economic Treaties

handle is hein.journals/conjil26 and id is 419 raw text is: THE THREE-PRONGED STRATEGY OF INDIA'S PREFERENTIAL TRADE POLICY A CONTRIBUTION TO THE STUDY OF MODERN ECONOMIC TREATIES By Julien Chaisse, Debashis Chakraborty, and Biswajit Nag* ABSTRACT Before the inception of the WTO, India generally did not pursue any regional economic agreement route to promote trade or to achieve any other goal. In the Post-Cancun Ministerial period, however, it has progressively entered into a number of preferential trade arrangements with several Asian, as well as non- Asian partners. Looking into India's regional economic integration approach, the current analysis makes an attempt to identify the major determinants behind the shift in the country's interests, and the policy implications of this change. We conclude that India's approach towards preferential trade can be depicted as a three-pronged PTA strategy: it can compensate for loss in the goods sector through gain in services or within the goods sector; loss in some sectors (due to tariff reduction) is to be compensated through effective market access of other products in which India has a potential advantage; or identification of India's specific interest in the partner country (which may be commercial, regional development or political). INTRODUCTION Over the last few years India has enhanced its presence in global commerce, fueled by the liberalization measures initiated since 1990. India has consistently experienced a GDP growth rate of more than six percent, even during recession periods. The growth pattern of India's economy enhanced its output level and consequently the urge to trade increased.' India's global share of merchandise exports has increased from 0.60 percent in 1998 to 1.30 percent in 2009, and commercial services has increased from 0.82 percent to 2.60 percent over the same period. In addition, since the Cancun Ministerial, India has been able to project itself as a major leader of developing countries in multilateral trade forums through * Dr. Julien Chaisse is Assistant Professor at the Faculty of Law, Chinese University of Hong Kong. Debashis Chakraborty is Assistant Professor of Economics at the Indian Institute of Foreign Trade, New Delhi. Dr. Biswajit Nag is Associate Professor at the Indian Institute of Foreign Trade, New Delhi. The authors would like to thank Habib Gherari, Bryan Mercurio, Satchidanand Seethanen, and Nick Thomas for comments on earlier drafts of this paper. The views expressed by the authors here are personal. I. Michele Alessandrini et al., Tariff Liberalization and Trade Specialization in India 2-6 (Asian Dev. Bank, Working Paper No. 177, 2009). 415

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