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India – Measures Affecting the Automotive Sector*

  • Kyle Bagwell (a1) and Alan O. Sykes (a2)

This study addresses the disputes brought to the World Trade Organization (WTO) by the European Communities and the United States concerning certain Indian measures affecting the importation of automobiles and components in the form of “completely knocked down” (CKD) and “semi-knocked down” (SKD) kits. The measures in question originated during a time when India employed extensive import licensing requirements, ostensibly for balance of payments purposes. India’s broad licensing regime was challenged in 1997 by the European Communities and the United States, resulting in a settlement with the European Communities and a ruling in favor of the United States pursuant to which India agreed to abolish its import licensing system. Some restrictions in the automotive sector remained, however,which became the subject of this proceeding.

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We wish to thank Alberto Martin for valuable assistance, and to thank the other reporters and conference participants of the American Law Institute for many valuable ideas and suggestions.

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Brander James and Spencer Barbara (1981), “Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry,” Canadian Journal of Economics, vol. 14, 371389.
Corden W. M. (1971), The Theory of Protection, Oxford: Oxford University Press.
Grossman Gene M. (1981), “The Theory of Domestic Content Protection and Content Preference, The Quarterly Journal of Economics, Vol. 96, No. 4, November, 583603.
Vousden Neil (1990), The Economics of Trade Protection, Cambridge: Cambridge University Press.
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World Trade Review
  • ISSN: 1474-7456
  • EISSN: 1475-3138
  • URL: /core/journals/world-trade-review
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