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WTO Related Sectoral Studies
Objectives of the Study
The broad objectives of the studies were - To assess the existing status and to identify the constraints, concerns and technology gaps of the industry; To assess the impact of WTO on the industry especially in terms of future marketing scenario. To draw comparative bench-marks with international scenario and To provide inputs for appropriate policy formulation in respect of the select industrial sectors. The studies were based on desk research and a field survey of about 200 small scale manufacturing units, exporters, dealers, industry associations, etc. Broad Observations of Consultants The SSIs particularly those in the tiny sector are not much aware of the implications of WTO agreements and their impact on their share in the domestic and export markets Reduction in import duties under GATT and removal of QRs had increased the inflow of low cost imports particularly from China and affected the domestic sales of SSIs leading to dwindling profit margins. On the positive side reduction in duties on imports of good quality raw materials and accessories had improved the access of domestic industry to crucial raw materials resulting in improving the quality of finished products like high value ready-made garments, leather goods, gold jewellery etc., resulting in better export realizations. The principles of MFN and National Treatment under GATT had provided wider opportunities to Indian manufacturers in the markets of other member countries, as no discrimination was permitted between imports from member countries. However in the domestic market this had created increased competition for SSIs, which is expected to lead to in consolidation of the industry. Those intending to survive will have to grow in size, set up optimum capacities, enter into strategic alliances with LSIs in their sector or their SME counterparts in other developing countries or enter into tie-ups with global manufacturers SSIs will have to concentrate on manufacturing products in which they have a clear cost advantage.
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