(a) Discuss the characteristic features of Agreement on Agriculture (AOA) under Uruguay Round of GATT and examine its impact on…

Agreement on Agriculture The Uruguay Round’s Agreement on Agriculture (AoA) brought farming into WTO discipline through three pillars. Domestic support was classified into Amber, Blue and Green Boxes: Amber Box measures are trade-distorting and subject to reduction commitments, while support below the de minimis threshold is exempt from reduction; Blue Box covers production-limiting programmes; Green Box covers non-trade-distorting public services. Market access required tariffication of non-tariff barriers and binding of tariffs, with tariff-rate quotas for sensitive products. Export subsidies were to be reduced. For India, the framework constrained price-support instruments such as MSP: where MSP is above the reference price, it is counted in AMS, and only support within the de minimis threshold is exempt, so large-scale price support becomes trade-sensitive. It limited policy space to shield farmers from volatile world prices and exposed foodgrain and edible-oil markets to import surges when domestic prices rose above import parity, especially where applied tariffs are low. These pressures complicate food security, as higher procurement and buffer stocks can conflict with trade commitments and fiscal limits. The AoA is also asymmetric: developed countries use Green Box research, infrastructure and decoupled payments extensively, while India remains constrained by Amber Box reduction commitments and de minimis thresholds, limiting its ability to use direct price support.

TPDS TPDS is a targeted food-security system built on BPL/APL identification, ration cards, dual pricing (fair price and open market), and decentralised procurement and distribution through FPOs/mandis and fair price shops. The central government procures foodgrains, while states distribute them to eligible households; BPL households receive subsidised rates, while APL households can buy at market prices. Its objectives are poverty alleviation, price stabilisation and nutritional security. It also aims to stabilise prices by releasing buffer stocks in the open market when prices rise, but its foodgrain-centric supply limits nutritional security. It has expanded coverage and reduced open-market price volatility, but success is partial. NFSA 2013 institutionalised entitlements for eligible households, but implementation depends on state capacity. Shanta Kumar Committee (2015) reported significant leakages, exclusion errors and poor targeting, especially for marginalised groups. Aadhaar-seeded e-PoS and One Nation One Ration Card (launched in 2019) have improved portability and reduced some diversion, yet leakages, inclusion/exclusion errors and nutritional gaps remain significant. TPDS is therefore useful but not fully successful unless targeting, supply and monitoring are strengthened.

FEMA FEMA 1999 replaced FERA after the 1991 balance-of-payments crisis, shifting from conservation of foreign exchange to its management and facilitation. Its salient features are current-account convertibility, liberalisation of capital-account transactions subject to RBI rules, delegated legislation to the RBI, and a civil-offence framework. FEMA applies to current and capital account transactions and gives the RBI wide rule-making powers to regulate, monitor and penalise contraventions. Unlike FERA, FEMA presumes innocence, treats contraventions as civil rather than criminal, and removes draconian imprisonment and confiscatory penalties. This reflects the lesson that excessive controls stifled investment and trade, while India’s growing forex reserves and global integration required a flexible regulatory architecture. FEMA thus deviates from FERA in philosophy, enforcement and penalties, enabling India to manage external risks while attracting capital.

In synthesis, AoA, TPDS and FEMA show India’s evolving economic governance: trade commitments constrain agricultural support, food distribution must balance equity with efficiency, and forex regulation has moved from control to facilitation. A way forward is to use WTO flexibility, strengthen TPDS targeting and nutrition, and maintain a rules-based forex framework that safeguards reserves without deterring investment. This requires better data, state coordination, and a regulatory stance that is neither protectionist nor reckless, while preserving policy space for farmers and food security and macroeconomic stability.