Further, with regard to market access, the developing countries will have two concessions. One, they will be allowed to designate an appropriate number of products as Special Products, based on the criteria of food security, livelihood security and rural development needs. And, two, a Special Safeguard Mechanism (SSM) would be established to enable them to stave off threats from sudden spurt in imports.

However, it is not all hunky-dory for the developing world; there is a trade-off involved. The developing countries have been made to agree to overall tariff reductions in respect of industrial products, though a clear formula for doing so is yet to be worked out.

The rich countries want to see that the tariff barriers come down significantly on most of the manufactured goods and services. Today, manufactured goods account for about 60 per cent of the global trade. Even in the case of farm subsidies provided by the developed countries amounting to $ 320 billion per annum, there are provisions that could be used to thwart the actual reduction in government support to farmers. For instance, farmers in the EU and the US derive benefit from Amber Box subsidies if they produce more, from Blue Box subsidies that give incentives to limit production, and from Green Box subsidies doled out in the name of environment and livestock protection.

Though the Geneva package provides for capping of Blue Box support to 5 per cent of a country's average total value of agricultural production during a historical period (to be negotiated), there are loopholes.

For instance, the draft provides for ensuring that a member country that has placed an exceptionally large percentage of trade-distorting support in the Blue Box may not be asked to make a disproportionate cut to bring it to 5 per cent of its total agricultural production. In the US, about 70 per cent of the total domestic support to agriculture was granted under the Blue Box category in 2001.

The framework also contains a proposal to review Green Box. Hence, the developing countries must be on guard to ensure that the developed countries do not shift some of their trade-distorting support given to agriculture under other heads to the Blue Box.

Similarly, there is no move to do away with the so-called Green Box subsidies; there is only a proposal to review them. Moreover, the developed countries could use the provision for restricting imports of sensitive agricultural products to thwart exports from developing countries.

A number of foreign trade experts and researchers studying WTO issues have rightly warned that the devil may lie in the details. As of now, the Geneva accord is vague on most issues and if experience is any guide, the developed world is unlikely to yield ground easily. Hence, India and other developing countries should be on guard and prepare adequately for the upcoming negotiations.

The framework text has identified five areas for further negotiations, namely, agriculture, non-agricultural market access (NAMA), development issues, trade facilitation, and services. On each of these issues, there will be hard bargaining.

Against this backdrop, it is of crucial importance for India to make a careful study of the implications of the accord for the country's domestic agenda and prepare to face the challenges without wasting time. The challenges are formidable for the country's agricultural sector as well as for the manufacturing sector.

In the case of agriculture, it is time the country pays much greater attention to increase productivity and create exportable surpluses and make agriculture more competitive if the final outcome of WTO negotiations is to be translated to its advantage.

Today, a large proportion of our agriculture is characterised by small uneconomic holdings and subsistence farming. In several parts of the country, it is not uncommon to come across many small and marginal farmers who have stopped cultivating their land because of repeated crop failures and mounting debts.

Since more than 80 per cent of the land holdings in India are small (less than two hectares), it is not an easy task to make Indian agriculture globally competitive. Hence, serious efforts are needed to find a solution to this problem through consolidation of land holdings. Small farmers need to be encouraged either to go for co-operative farming or lease their land to private companies for corporate farming.

Already, there are some encouraging signs of large industrial houses and companies entering into direct contracts with the farmers. Taking a cue from the likes of Hindustan Lever and ITC, quite a few top corporates as also mid-sized firms have initiated backward integration of their operations, thus doing away with the middlemen. Companies such as Tata Chemicals, Rallis India, and Mahindra and Mahindra have formed novel partnerships with the farmers.

EID Parry of Muragappa group has tied up with paddy farmers in the region to grow high-yielding rice varieties and market them through its elaborate network. MNCs such as Pepsi Foods and McDonalds have also discovered that sourcing directly from farmers is a profitable arrangement.

With food retailing coming of age, several retail chains have started procuring their requirements directly from the farm gate. This trend is expected to pick up over the next few years.

The Government should encourage banks and financial institutions to provide project finance and credit for such enterprises to ensure that the trend picks up fast. This kind of relationship between corporates and farmers will help bring about vertical integration from the stage of production to final processing and marketing that would help reduce market risk and post-harvest losses and induce farmers to invest in new technologies to increase productivity.

In the case of the manufacturing sector, there is already a new awakening. The efforts by the corporate sector at restructuring, cutting costs, improving labour productivity and technology upgradadation over the past few years have finally started yielding results. Unlike three-four years ago, the Indian corporate sector is now brimming with confidence and is not unduly worried about competition in the international market. There have been growing instances of Indian companies setting shop abroad and acquiring foreign companies.

Despite this increased confidence, however, the Indian manufacturing sector has still to go a long way if it has to increase its share in the global trade and withstand international competition with import tariff slated to decline sharply. It will need a much higher level of infrastructure and policy support from the Government. In particular, it will need adequate and assured power supply at reasonable price, better rail and road connectivity and modern cargo handling facilities at ports so that the current high transaction costs come down.

The stiff opposition from the Left parties supporting the UPA Government for inviting FDI in crucial infrastructure and other sectors, privatisation and labour sector reforms do not augur well for the healthy growth of the manufacturing sector.

There is also the danger of the country slipping back to the control and permit raj of yesteryears, if the Prime Minister fails to rein in some of his Cabinet Ministers.For instance, the Minister for Chemicals and Fertilisers, Mr Ram Vilas Paswan is contemplating a price regulatory authority for the steel industry and wants to bring more drugs under the price control regime. He has refused to even consider privatisation or sale of loss-making fertiliser units under his Ministry. This could spell the ruin of industries under his Ministry that have seen a turnaround in their fortunes after a long spell of demand recession.

Fortunately, the country's manufacturing exports are currently showing signs of entering a new growth trajectory, thanks to a combination of favourable factors. Sectors such as automobiles, auto-components, steel, engineering goods, textiles and pharmaceuticals have become more outward-looking and the Government should extend all possible policy support to sustain this trend and extend it to other sectors of the industry.

The Finance Minister would do well to extend the excise duty concessions given to cotton textiles this year to man-made textiles and fibres also. Though he has promised to do so in his next Budget, it would help provide a much-need push to the sector if he does it right now before the end of the quota regime on December 31 this year.

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