21st April, 2016 (MAINS)

TODAYs ANSWER WRITING CHALLENGE FROM GS-II

Q1. The aim of Information Technology Agreements (ITAs) is to lower all taxes and tariffs on information technology products by signatories to zero. What impact would such agreements have on India’s interests? [12.5marks/2014/GS-2] 200 words.

Please write answer in the comments section.

  • Shashank Garg

    ITA a plurilateral agreement signed in 1996 has so far not been very yielding for India. Major impacts on India are:

    1. Indian market is flooded with goods made in countries with well-established industries, affecting the growth of nascent electronic goods industry.

    2. India is losing out on the Import duty revenue which it could have used to develop its own IT industry.

    3. India’s IT industry relies on outsourced work by western countries and free movement of labour is necessary for its development. The Agreement overlooks this point.

    4. Since these products are used for many strategically important purposes including telecommunication, broadcasting; heavy reliance on imports makes India vulnerable to security threats.

    Given the problems with ITA- I, India have declined to participate in the talks for ITA-II which proposed to bring more products in its purview. If the agreement is signed, India would be pressurized to sign the agreement, sooner or later. To make the most out of ITA and other Free Trade Agreements, India needs to be a better negotiator in international forums and also develop its indigenous industry.