Trade Policy and Determinants of Trade in Agriculture
India has been faithful in meeting the requirements of WTO in terms of the removal of quantitative restrictions on agricultural commodities. With this, India enters into a new regime of agricultural trade policy. Hitherto, trade in agriculture was treated as a residual and the impact of policy change was predictable. But with change in the policies due to external factors, predicting the impact is difficult. In analysing the determinants of trade in agricultural commodities and the impact of policy changes on the commodities liberalised in the early nineties, it is seen that domestic production has been a strong determinant of trade in agriculture. Even after liberalisation, these commodities are more sensitive to domestic supply conditions, rather than to prices which questions the liberalisation in practice
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