The combined effects of both domestic reforms and WTO commitments in the last decade have changed the environment in which the Indian dairy industry will operate in future. Terms of trade is a significant indicator of gains from trade and efficiency of domestic industry. In average terms, the terms of trade of Indian dairy products has declined in the post-liberalization period as compared to pre-liberalization years. The year-wise trend is unstable with wide fluctuations in post-liberalization years. The real effects of trade liberalization will unfold only when the WTO provisions are properly implemented.

Developments with regard to domestic and global market changes have transformed the Indian dairy industry, which is predominantly for sustenance, into a market-oriented industry. In early 1990s, the Government of India embarked upon a new economic reform which favored the increasing privatization and liberalization of all the sectors of economy, including the dairy sector. Subsequently, the dairy industry entered a new phase as India signed the Uruguay Round Agreement (URA) of General Agreement on Tariffs and Trades (GATT), which culminated in the formation of the World Trade Organization (WTO). Thus, the combined effects of both domestic reforms and WTO commitments may well reconstruct the environment in which the Indian dairy industry will operate in future. As the International trade restrictions and regulations are gradually melting away in the wake of the WTO negotiations, the traditional dairy sector which had so far been under high levels of government interventions and regulations, has now moved to a situation with commonly acceptable trade barriers, export subsidy restraints and minimum market access provisions that will surely put the industry on a new gear.

Trade Liberalization and Terms of Trade in Dairy Products in India, industry, domestic, agriculture, barriers, International, liberalization, regulations, restrictions, economic, embarked, export, fortitude, global, Government, Agriculture, marketoriented, Organization, policies, privatization, subsidy, Tariffs, Trades, traditional, traditional.