Context
- On February 13, 2025, India and the U.S. agreed to negotiate a multi-sector Bilateral Trade Agreement (BTA) by fall 2025.
- The scope of the BTA is unclear, and it is not labeled as a Free Trade Agreement (FTA).
- The agreement must comply with World Trade Organization (WTO) law, as both countries are WTO members.
WTO and Free Trade Agreements (FTAs)
- The WTO follows the Most Favoured Nation (MFN) principle, which prevents preferential treatment between trading partners.
- Article XXIV.8(b) of GATT permits FTAs as exceptions to MFN, provided they cover “substantially all trade” between the signatories.
- If India and the U.S. reduce tariffs selectively on a limited range of products without covering most trade, it would violate WTO rules.
Using ‘Interim Agreements’ to Comply with WTO Rules
- Article XXIV.5 of GATT allows countries to sign an ‘interim agreement’ as a step toward forming an FTA.
- Such an agreement must include a schedule to establish an FTA within a reasonable timeframe (typically within 10 years).
- If India and the U.S. use an ‘interim agreement’ without real intent to form an FTA, it would be legally indefensible under WTO law.
The ‘Enabling Clause’ Exception
- The WTO’s ‘enabling clause’ allows developing countries to receive preferential market access without violating MFN rules.
- Since India’s BTA with the U.S. involves mutual tariff reductions, it likely does not qualify as an enabling clause arrangement.
- The U.S. benefits from lower tariffs on its exports to India, making it inconsistent with the spirit of the enabling clause.
Need to Uphold WTO Laws
- The U.S. under Donald Trump promoted ‘reciprocal tariffs’, which violate WTO rules on MFN and Special & Differential Treatment (S&DT) for developing countries.
- S&DT allows developing nations like India to offer less than full reciprocity in tariff commitments towards developed countries.
- India must ensure that the BTA aligns with WTO principles and does not succumb to U.S. pressure for MFN-inconsistent trade practices.
Flawed food regulations fuel the obesity crisis
Context
- 1 in 4 adults in India are obese, and 1 in 4 are either diabetic or pre-diabetic (National Family Health Survey-5).
- The 2025 Economic Survey recommends a ‘health tax’ on ultra-processed foods (UPFs) to curb their consumption.
- However, India’s weak food marketing regulations could undermine efforts to tackle obesity.
Issues with Labelling and Advertising Regulations
- The Food Safety and Standards Authority of India (FSSAI) has failed to implement effective labelling and advertising regulations planned in 2017.
- Front-of-pack labels (FOPL) are not yet implemented, allowing UPFs to be heavily advertised.
Problems with the Indian Nutrition Rating System (Health Star Rating – HSR)
- In September 2022, the FSSAI introduced the Indian Nutrition Rating system, modeled after Australia’s ineffective ‘health star’ system.
- This star-based system is misleading, allowing unhealthy foods (e.g., biscuits, sugary drinks, cornflakes) to appear healthier than they are.
- FSSAI ignored its own 2021 draft regulations, which proposed mandatory warning labels instead of stars.
- Food industry representatives influenced key policy decisions, sidelining scientific experts.
Global Best Practices and Warning Labels
- Warning labels (e.g., “high in sugar” or “high in salt”) have been proven effective in reducing UPF consumption.
- Example: Chile’s black ‘high in’ labels led to a 24% drop in UPF consumption.
- India should replace stars with mandatory warning labels based on WHO or Indian dietary guidelines.
Weak and Ineffective Advertising Regulations
- India has four laws to curb misleading food advertising, but they remain ambiguous and ineffective.
- The Consumer Protection Act, 2019, defines misleading ads but does not mandate nutritional disclosure in advertisements.
- There is no clear definition of HFSS (high fat, salt, and sugar foods) or UPFs, making enforcement difficult.
- This allows junk food companies to aggressively market products, particularly to children and youth.
Steps to Strengthen India’s Regulatory Framework
- Scrap the Indian Nutrition Rating system and adopt warning labels for HFSS foods.
- Set clear sugar/salt/fat limits using WHO and Indian nutrition guidelines.
- Amend existing laws or introduce a new law to ban misleading junk food advertising.
- Launch a nationwide public awareness campaign on the health risks of UPFs.
Conclusion: The Need for Urgent Policy Action
- India’s obesity crisis is not a public failure but a policy failure.
- The Economic Survey provides a clear roadmap, but political will is needed to act swiftly.
- Without strong regulatory measures, the goal to halt obesity by 2025 will fail.
- A healthy India requires decisive action, not just rhetoric.