'India can still ride the wave by continuing trade liberalisation'

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: The World Bank, in a recent report, World Trade Indicators (WTI) 2008, has described India’s trade regime as “much more restrictive” than its Bric peers. It ranked India a poor 117 out of 125 countries after judging it by the latest Trade (Most Favoured Nation) Tariff Restrictiveness Index. The report also ranked India 177 in the subcategory on enforcing contracts. It ranked ease of doing business in India at a lowly 120 (out of 178), which, although a substantive improvement over its previous rank of 132, still reflects a generally poor business environment.

However, India fared well on all aspects of the 2006 Logistics Performance Index with a rank of 39 (out of 150). To get an insight into the World Bank’s new database and ranking tool—the WTI compared results in 210 countries and customs territories—as well as to find the reasons behind India’s poor performance, FE’s Arun S spoke to Gianni Zanini, the World Bank Institute’s Trade Programme Leader. Excerpts:

What were the challenges in preparing this exhaustive report?

The main problem was in putting together data that was scattered all around in different places and agencies. We also had to understand certain jumps in the data and go to people with specific country knowledge to understand the peculiarities and idiosyncrasies of data. However, in the case of India, the data was available. No agency or data collector can afford to not cover India well.

How do you justify not including trade-distorting subsidies by rich countries in the report?

The problem with trade-distorting subsidies in agriculture is one affecting a number of OECD countries. The databases and analyses are available from OECD. But since it is limited to such a small number of countries, we did not think it would make much sense to add it. The database covers over 200 countries and we do not have comparable data for the other countries that can be updated and maintained. It does not mean that there are no subsidies and support in other countries.

If this report had come earlier, it could have helped countries like India defend their positions better in trade talks, including at the WTO’s Doha Round…