The BJP government is being true to its word of taking a more activist line on India's links to the World Trade Organisation (WTO). Increasingly it seems that it may also be a sensible line. The government's decision to comply with the WTO ruling against India on its patents law on a complaint filed by the European Union is no more than a formality.India recently lost a similar case to the United States and is committed to amending its patents law before the end of April next year anyway. Still, the Cabinet's clearance with the explicit acknowledgment that a retaliatory withdrawal of trade concessions by its trading partners could hurt India is a welcome display of pragmatism and an effort to educate public opinion.But the government's renewed focus on trade is not confined to this. Two days ago the commerce minister announced fairly radical plans to boost India's exports in the medium and long term: amending labour laws for exporters and export zones and dereserving sectors with great exportpotential.The test will lie of course in whether these proposals see the light of day. Meanwhile, the Cabinet has made known its intention to introduce a Bill, in keeping with the WTO agreement's so-called safeguards provisions, to restrict imports which might injure Indian producers. This shows that the government is trying to strike a sensible balance between freer trade and its own commitment to the interests of Indian industry.India has hitherto only tried to catch up with events in world trade. At last there are signs that it is anticipating matters, preparing the country legislatively and conceptually for the huge changes being wrought by the world trade agreement of four years ago, and striving to make India a more important trading nation and give it a greater say in trade affairs.According to existing agreements India will remove quantitative restrictions on large numbers of imports between now and 2003. The proposed Bill is meant to take care of contingencies which may arise from this and apossibly deteriorating trade balance. But it is imperative that these valid concerns do not degenerate into out and out protectionism.The timing is singularly propitious for Indian and developing world concerns on globalisation to be taken more seriously. Given the global crisis and the rising protectionist sentiment in developed countries the international mood is to be far less hostile to countries taking steps to protect themselves from the less healthy aspects of globalisation.Even so it may be premature for India to push too hard for restricting world capital flows through an international agreement. Recent statements by Yashwant Sinha, Jaswant Singh and Ramakrishna Hegde suggest a concerted attempt by India to bring this to the top of the world's agenda.But worries about capital flows are already on the world's agenda. India has escaped relatively unscathed from the currency crisis because it has yet to see full capital account convertibility. What it needs to do through this crisis is tospeedily reform its banking and financial sectors so that when the world economy recovers and pressure resumes for India to open up, it is not caught unprepared.
