• WTO AT BALI: Multilateralism versus Regionalism in Trade

    By Pradeep S Mehta

    India’s food security concerns are addressed. The US was recalcitrant. It has little appetite for the DDA and has, therefore, been pursuing two mega regional deals. The US wanted the accord on trade facilitation badly. However, trade facilitation is a win-win deal and has been welcomed by all. This deal is expected to generate about US$1tn gain to all countries, of which most will accrue to the developing world. In the end, multilateralism stood its ground, and that is the best way forward for all countries. The scene will now shift to Geneva, where negotiators will work out the nuts and bolts of what they have agreed at Bali, and tackle the unfinished agenda of the DDA over 2014 and beyond. More…

    Economic Times, December 23, 2013

  • Ending Bali on a high

    By Pradeep S Mehta and Bipul Chatterjee

    After months of intense negotiations in Geneva culminating in a ministerial conference, trade ministers finally delivered the Bali package. As India’s Commerce Minister, Anand Sharma, said: “A historic day for the WTO. India’s food security concerns are addressed.” Despite intense political pressure, India stood its ground and helped the global trade community deliver a ‘balanced’ package incorporating a number of development issues. It was a deal limited to three specific issues of the Doha development agenda, being negotiated since 2001. More…

    The Hindu Business Line, December 17, 2013


  • Fiscal deficit target, a joke

    By Pradeep S Mehta and Amol Kulkarni

    The Finance Minister has repeatedly asserted that India’s current account deficit and fiscal deficit will be limited to US$70bn and 4.8 percent of the GDP, respectively, during the current fiscal. While the former seems plausible on the back of recent policy revisions, decline in imports and growth in exports, the latter seems difficult, especially seen in light of the government’s past performance. As 2013 and 2014 are election years, it would be nearly impossible for the government to comply with the deficit targets…Thus, it would be a challenge for the Finance Minister to keep his promise. More…

    The Hindu Business Line, November 03, 2013


  • We need a National Sarpanch

    By Pradeep S Mehta

    A recent poll among over 5,000 young people on who would make a good prime minister, more than half suggested a presidential form of government. Surely, this must have emanated from the sad experiences of horse trading in Parliament over policy debates, including whimsical partners walking out and walking in. This reinforces the point that the Westminster model of democracy is unsuitable for a stable government in India. More…

    Economic Times, September 25, 2013

  • Singed by the potash cartel

    By Pradeep S Mehta

    A large number of cartels, particularly in the natural resources sector, operate in the world, the most egregious one being crude oil. Since drilling for oil is considered a sovereign activity, the OPEC cartel does not violate any competition law in the world. With the recent break-up of the Russian-Belarusian potash cartel – Russia’s Uralkali quit the Belarusian Potash Co. (BPC) partnership and broke up a marketing venture that controlled about 43 per cent of global exports – the potash cartel is in the news again. More…

    The Hindu Business Line, September 18, 2013

  • Proscribe pay-for-delay

    By Pradeep S Mehta

    In the pharma company Actavis case, the Federal Trade Commission observed that reverse payment settlements should be declared unlawful as a general rule because they are anti-competitive and harmful to consumers by directly restricting output and raising prices. Although no concrete action has been taken against such deals as yet in India, nothing prevents Competition Commission of India to carry out investigations to uncover such shady deals and take action. Banning such deals, in India as well as globally, will not only save consumers extra money, it will also help prevent patients from discontinuing their necessary medication because of high cost of brand-name drugs. It is yet to be seen how quick the world’s largest market for generic drugs realises the need to do the same. More…

    Financial Express, September 16, 2013

  • Food for thought at Bali

    By Pradeep S Mehta

    As we draw closer to the ninth ministerial conference (MC9) of the World Trade Organisation to be held in Bali, Indonesia, there is growing optimism that members may finally be able to strike a deal in December.Although the proposed ‘small package’ remains a far cry from the conclusion of the protracted Doha development round, it could provide the impetus for members to finally break through the impasse that has characterised these talks since their breakdown in 2008.Having previously been opposed to the idea of an early agreement package, India now supports an early outcome. But it is of the view that if a small package is to be the result of the deliberations in Bali, it is imperative that development be at the core of all negotiations. More…

    The Hindu Business Line, September 04, 2013


  • Flying in the face of the free market

    By Pradeep S Mehta

    The proposal by the Ministry of Civil Aviation to create a cell to keep a watch on airfares and report unusual patterns to the Competition Commission of India (CCI) is anathematical to free market principles. Airlines follow a dynamic pricing strategy of charging passenger fares depending on when a flight is booked or on the simple principle of supply and demand on a particular route at a point of time. Nowhere in the world do governments regulate airfares, but they do expect their competition agencies to take deterrent action against the colluders. The government’s role is to promote competition in the marketplace so that players do not exploit the market. More…

    Business Standard, July 30, 2013

  • Institutions and Economic Transformation

    By Pradeep S Mehta and Bipul Chatterjee

    Inclusive growth happens only when people have been empowered and when political and economic institutions play a much greater role in the economy. The issue is not about growth versus equity. It is about growth and equity. Is it possible to achieve both at the same time without one undermining the other? Yes it is, though the relative degree will vary depending on local dynamics, the quality of governance and the political will to address linkages that can result in more equitable outcomes of growth. It is also important to understand that excessive inequality can have an adverse impact on growth prospects and, therefore, both should be addressed concomitantly. More…

    The Broker, July 26, 2013

  • Why is business afraid of a more efficient competition law?

    By Pradeep S Mehta

    Traditionally, business opposes any competition law around the world, because they fear that its application will bite into their bottom lines, which is an extremely misplaced fear. Perhaps, they are ignorant of the fact that a competition law actually builds up their balance sheets, as many studies have shown, by making them more efficient and regulating the anti-competitive practices of their competitors, input suppliers and distributors…Any law anywhere in the world is not static and changes are made depending upon the experience that is gained, so what’s wrong with the proposed amendment bill?. More…

    Financial Express, July 05, 2013


  • Time to check the Khemka syndrome

    By Pradeep S Mehta

    In April 2013, the Haryana government transferred senior IAS officer Ashok Khemka for the second time in six months (44th time in his 22-year career). The use of transfers and postings in States as a means of harassing officers who are inconvenient because of their professional independence or because they are perceived to be close to an outgoing chief minister is a well-known phenomenon. Articles 310 and 311 of the Constitution make it impossible for civil servants to be dismissed or demoted by elected representatives. However, politicians exert control over policy outcomes by reshuffling the bureaucracy across posts of varying importance. The “politicisation” of the bureaucracy has become a major public policy issue in India. More…

    The Hindu, June 05, 2013


  • Whither, global trading system?

    By Pradeep S Mehta

    The new Director-General of the World Trade Organisation (WTO), Roberto Carvalho de Azevedo, will face a Sisyphean task in breathing life into the comatose Doha Round that has been under negotiations since its official launch in November 2011. The talks have failed to make much progress, made worse by fragmentation due to a spaghetti bowl of preferential trade agreements (PTA), many of which have been signed or are under construction. The international community’s challenge now is to resurrect trade multilateralism, because PTAs are not the best option; the bigger partners often get the better of the smaller parties in these treaties. That is why multilateralism needs to be resuscitated. But that calls for a fresh approach. More…

    Business Line, May 14, 2013


  • APMC Reform a Must

    By Pradeep S Mehta

    The Agricultural Produce Market Committees (APMC) Act was designed with the lofty goal of protecting farmers from the vagaries of the market, but its purpose has been turned on its head to enrich traders (and politicians) and harm farmers and, in turn, consumers’ interests adversely. APMCs have been statutorily vested with the power to regulate both the creation of agricultural markets and also the entities that can participate in such markets. However, this range of exercise of powers by APMCs has resulted in collusive behaviour in the supply chain of agricultural marketing. The APMCs have, therefore, become bottlenecks as they regulate who the farmers sell to and who can participate in the market and even where markets can be established. More…

    Financial Express, April 12, 2013


  • Need for a realistic penalty regime

    By Pradeep S Mehta

    Most competition agencies have developed transparent guidelines for fining/penalties. Indeed, many of them did so after being questioned by courts, such as US, EU, France and so on. Most such guidelines follow a three step approach for defining the penalty amounts. It is thus recommended that for less serious contravention, the minimum amount should be 3% of the overall turnover; 5% for serious contravention, and 7% for very serious contravention. Recidivists (repeat offenders) would come under the third category even though their violation did not come under the same, if it was done the first time. Indeed, the gravity of the violation can differ due to subjectivity, but will need to be defended by the CCI. More…

    Financial Express, March 29, 2013


  • Re-inforce people’s trust trust to restore growth

    By Pradeep S Mehta A new leader, a growth panel, and judicial, electoral and governance reforms are the steps to restore people’s trust. Among a menu of discordant happenings and noises, one arm of the government says that we can expect five percent growth, while another says it is a mistake, and we can expect higher growth. Consequently, and also due to variety of other factors, people are losing their faith and confidence, and worse, do not trust the polity or the bureaucracy or business. The system needs an overhaul. Many of these steps need to be taken up by the government in a proactive fashion, and with the active involvement of states. Only then can we destroy the enemy, who is among us. More…

    Economic Times, February 25, 2013

  • India and the WTO procurement deal

    By Pradeep S Mehta Government procurement holds out promise in the context of slowdown, but India should weigh its options. In 2010, India attained an ‘observer status’ in the WTO Government Procurement Agreement (GPA). Its ascension to full member status in GPA hangs in the balance. It gathered momentum with the slowdown in world trade and increase in current account deficits of several major economies. More…

    The Hindu Business Line, February 21, 2013

  • The Competition Commission is not as bad as is portrayed

    By Pradeep S Mehta “What is very important is the quality of the regulator, the whole principle; architecture ultimately depends on the calibre, quality and the professional capability of those who are going to actually carry on the process of regulation.” Thus spoke Ashok Chawla, chairman, Competition Commission of India (CCI) while launching the CUTS/CIRC third biennial report on the State of Competition & Regulation, 2011 in Delhi on December 27. The report inter alia bares the quality of regulation and the independence of regulators, including the competition agency, in India. Perhaps, Chawla was expressing his angst on how they are doing. A lot can be said about the CCI’s abilities to come out with some excellent reasoning in its judgments. With time, we hope that this is a pervasive feature of all of its orders. More…

    Financial Express, February 11, 2013

  • Cross border Trading on opportunities

    By Pradeep S Mehta One feels sorry about the recent tension between India and Pakistan across the line of control not only due to the losses of precious lives on both side but also due to the fact that such unfortunate incidents may ruin the nascent peace process. However, it is heartening to note that tension is easing off and both the governments still seem to continue working towards implementation of SAFTA through bilateral trade normalisation. Last two years had witnessed a number of promising developments on commercial relations between India and Pakistan. And they have to be nurtured as against just crying over Pakistan’s decision to delay the grant of Most-Favoured-Nation status to trade with India. Recent developments show that Pakistan has provided de facto MFN to India. More…

    The News, Pakistan, February 03, 2013


  • A Regulator for Land Acquisition

    By Pradeep S Mehta

    The current land acquisition Bill talks about direct transaction between buyers and sellers of land. Given the fact that landholding patterns in India are largely fragmented, coupled with large-scale absentee landlordism, such direct transactions will be impossible as there will be huge transaction costs. The state has a legitimate role in land acquisition for industrial development and that should be done institutionally: as a facilitator through independent regulation against a control structure. The Bill on land acquisition should be revised accordingly to upfront say why states should have a role in it by incorporating provisions for the institution of an independent regulator for land acquisition. More…

    Economic Times, January 28, 2013

  • Indo-Pak trade needs a push

    By Pradeep S Mehta, Abid Suleri and Joseph George

    Trucks to Pakistan, at Attari -Wagah border near Amritsar…Trade can be enhanced in 65 per cent of the tariff lines, with Pakistan having moved to a negative list approach. Instead of waiting, non-state actors should reinforce governmental efforts with their own and take advantage of opportunities of improved commercial relations. The last two years have witnessed a number of promising developments on commercial relations between India and Pakistan. And they have to be nurtured, as against just crying over Pakistan’s decision to postpone the grant of the most-favoured-nation (MFN) status to trade with India. Recent developments show that Pakistan has provided de facto MFN status to India. The Indian establishment should look at it as a deferred success of its diplomatic efforts. More…

    Business Line, January 14, 2013

  • India gets the wrong end of trade deals

    By Pradeep S Mehta

    India’s trade competitiveness has declined in recent years, especially with those countries or regional entities with which it engages through preferential trade agreements (PTAs). Export and import data till September 2012 show that the country has not been able to reap optimal benefits from such arrangements. In fact, PTAs have facilitated more imports than exports for India – especially owing to low-tariff rates of partner countries – and show no signs of reduction. Given that most countries are moving towards bilateral or plurilateral agreements, India cannot afford to remain oblivious to this trend. Therefore, India needs to be more cautious in analysing its costs and benefits when signing such trade agreements in the future. More…

    Business Standard, January 08, 2013