India apprehensive despite gains in WTO deal

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Mumbai/New Delhi, July 17: : India stands to gain from a global trade deal if it helps curb developed countries' farm subsidies and deepens trade in services but many, including industry, have misgivings over what the real benefits will be.

Union commerce minister Kamal Nath spelled out his demands on Wednesday ahead of a ministerial meeting in Geneva next week that many see as the last chance to push the Doha round talks forward before a change of US administration in 2009.

He said that he expected developed nations to reduce their farm subsidies substantially, a key sticking point for India with its 600 million farmers, and said he would not be flexible unless he got a good package on trade in services.

"The prime minister is of the view we should try and see this closes but unless India's interests are met in our sensitivities we should not move forward," Nath said.

To complicate matters, the government faces a confidence vote in parliament on July 22 after parting ways with its communist allies over a nuclear energy deal with the United States.

The vote means Nath will miss the meeting's start, but he will spend the weekend in Geneva for informal talks with other ministers.

At the moment the vote is too close to call, but while there might be a hiatus in who to deal with should the government fall, analysts say India's negotiating position has broad consensus and is unlikely to change no matter who is in power.

"If it doesn't survive, even then the basic parameters stay very much intact so I don't think there will be any change in our position because of the changing political scene," said Nagesh Kumar, director-general at think-tank Research and Information System for Developing Countries.

Farm and Factory Defensive

India is a key negotiator for developing nations in the discussions, which have been under way since 2001 to open up world trade and help developing countries export more.

Industry fears current proposals would see India make bigger percentage cuts in tariffs on manufactured goods than developed countries -- which it says contradicts the Doha round's development goal and will not help labour-intensive exporters of products such as textiles, garments and leather goods.