I (Meaning and importance of Exports) Unit Structure

3.10.2 Positive Implications 
The positive impact of WTO on developing countries can be 
viewed from the following aspects. 
1. Growth in merchandise exports- 
The exports of developing countries like India, China, Brazil, 
etc. have increased since the setting up of WTO. The increase in 
exports of developing countries is due to reduction in trade barriers 
– Tariff and Non Tariff. For example, India‟s merchandise exports 
have increased by 4 times since 1995 as shown below. 
India‟s merchandise exports in 1995 35 US $ billion and 
2006-07 it is 126 US $ billion. 
2. Growth in services exports- 
The WTO has also introduced an agreement on services 
called GATS. Under this agreement, the member nations have to 
liberalise the services sector. Certain developing countries like 
India would benefit form such an agreement. For example India‟s 
services exports have increased from about 5 billion US $ in 1995 
to 76 billion US $ in 2006-07. The software services accounted for 
about 40% of the services exports of India. 

---

41 
3. Foreign Investment 
As per the TRIMs agreement, restrictions on foreign 
investment have been withdrawn by member nations of WTO 
including developing countries. Therefore, the developing countries 
like Brazil, India, China etc, have been benefited by way of foreign 
direct investment as well as by euro equities and portfolio 
investment. In 2006-07 foreign investment in India was 15.5 US $ 
billion, out of which FDI was 8.5 US $ billion. 
4. Textiles and clothing- 
It is estimated that the textiles sector would be one of the 
major beneficiaries of the impact of Uruguay Round. At the 
Uruguay Round, it was agreed upon by member countries to phase 
out most favourable area. Under most favourable area, the 
developed countries used to import quotas on textile exporting 
countries. Now it would benefit the developing countries including 
India by way of increase in export of textiles and clothing. 
Therefore, it can be concluded that the WTO has created 
both a positive and negative impact on developing countries. It is 
expected that the developing countries like Brazil, India China, 
South-Korea, would greatly benefit from WTO agreements in the 
coming years, provided they make efforts to improve efficiency and 
international competitiveness.