Last December at the World Trade Organization meeting in Bali, the Indian government—then run by the UPA—agreed to sign the Trade Facilitation Agreement (TFA), which was being hailed as a landmark in trade reforms. But the new NDA government has, surprisingly, backtracked from that commitment. As a result, the TFA has now missed its planned deadline of 31 July 2014.
The TFA aims to facilitate smoother international trade by simplifying customs processes and making them uniform for all 160 WTO member nations. It includes a wide range of provisions for expediting the movement, release and clearance of goods by ensuring that customs authorities and other related authorities of member nations will employ very similar forms and procedures. It also contains provisions that allow for special treatment for developing and least-developed countries, aimed at helping them implement the agreement.
If customs processes are unified and simplified, there could be huge benefits for the world economy—estimates suggest that it could enable the creation of an additional $1 trillion in global GDP and create 21 million new jobs across the world. This would be a boost of over 1 percent to the global GDP simply via the reduction of red tape.