While WTO negotiations in the communications, information systems, and services sectors are yet to be concluded, and India’s commitments are yet to be fully made, all other business segments are directly under the WTO regime. This means that more than 90 per cent of Tata companies have to prepare themselves for a trade order sans incentives. This is a mammoth task.

Realising the urgency and the importance of the situation, the Tata Group launched a strategic initiative in November 1999 to study the state of WTO-preparedness in its companies, and prepare them for the future. The group set up the Tata WTO Cell (TWC) in the DES as the central resource for all its WTO-related activities.

Besides networking with outside agencies and interacting with group companies, the TWC conducts studies, seminars and WTO-awareness programmes. Thus far 55 such programmes have been completed in Tata companies, wherein about 2,500 executives, also known as WTO evangelists, have taken through workshops. R. Gopalakrishnan, executive director, Tata Sons, has set a target of 5,000 WTO evangelists within the group by March 2003.

One of the major initiatives launched by the TWC is the WTO audit of Tata companies. The audit covers all strategic business segments in the group other than communications, information systems, and services.

Audit benefits
The need for such an audit is, essentially, to understand any given company’s operational aspects with respect to various WTO-compliance requirements, as applicable at present and probably in the future. The idea is to assess the level of the company’s competitiveness, and, hence, its survival and growth potential in a progressively liberalised, albeit adversarial and competitive, trade regime.

The WTO audit will, therefore, also measure the level of competitiveness of each Tata company — through a benchmarking exercise based on the industry in which the company operates.

Additionally, the audit will, through various controllable parameters, evaluate the company’s strategies to upgrade its status. Apart from identifying the extent to which a company may fall short of WTO-compatibility standards in various areas, the audit explores systemic factors beyond the company’s control, as well as controllable factors that are responsible for the shortfall.

In the first stage the audit identifies all major products or services of the company. This covers the entire value chain of products, with backward and forward linkages. The relevant WTO issues, present and probable, are then identified for all of the company’s products. This stage also defines benchmarks for each company, depending on the market and the industry in which it operates or may get into in the future.

Report review
The report card emerging from such an audit would, thus, reflect the company’s WTO-compatibility level, for now and later. This report, however, does not comment on managerial efficiency, as it is affected by the industry and the business environment within which the company operates, and government policy or the lack of it.

As of March 2002 the DES has completed audits of 10 Tata companies. The audits have covered trade agreements, technical barriers to trade, trade-related investment measures, subsidies and countervailing measures, and trade-related IPR and GATS.

Audits for other companies are in progress. By March 2003 the DES-TWC plans to conduct about 20 WTO-awareness programmes and a further 14 WTO audits in various companies. The people in the DES’s WTO’s cell have a busy year ahead.

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