Implications of China's Stance on Special and Differential Treatment (SDT)

China has announced it will not seek SDT in future WTO negotiations while maintaining its developing country status and existing benefits. This decision is partly due to escalating US tariff pressures and longstanding US objections. For India, China's move signals potential increased scrutiny on its own SDT claims.

Impact on India

• President Trump announced tariffs on Indian goods, increasing pressure on India to shed its developing nation status.
• India's economy size prompts demands for policy shifts, conflicting with its reliance on SDT for economic flexibility.

Agricultural Concerns

Agriculture, employing half of India's workforce, is a critical sector. The WTO Agreement on Agriculture (AoA) caps trade-distorting subsidies, posing challenges for India, which uses Article 6.2 exemptions for input subsidies.

• India's subsidies exceed WTO limits, drawing criticism from developed nations.
• Phased AMS reductions could lead to significant income and food security impacts, with potential malnutrition worsening.

Strategies for India

Agriculture

• Lead the G33 coalition to extend the Bali Ministerial's "peace clause" to protect public stockholding until 2030.
• Transition input subsidies to Green Box measures, aligning with WTO rules and supporting India's climate goals.
• Advocate updating AoA reference prices to reflect current market realities.

E-commerce

• Engage in plurilateral e-commerce talks for tariff-free access to developed markets.
• Expand the Open Network for Digital Commerce (ONDC) to empower MSMEs.
• Negotiate data localisation flexibilities and propose tiered data regulations.

Intellectual Property

• Maintain compulsory licensing under TRIPS for public health.
• Increase funding for biotech innovation to reduce dependence on generic exports.

Conclusion

India should leverage its strengths while phasing out non-essential SDT, advocating a tiered SDT framework based on GDP or sectoral competitiveness. Proactive steps will help India shape a balanced WTO environment.