2. #
INTRODUCTION
• The objective of Trade-related
Investment Measures(TRIMS) is to
prevent member countries from
resorting to measures that violate non-
differential treatment between domestic
and foreign investors and impose
quantitative restrictions on imports and
exports.
3. #
Towards this end, the WTO provisions
explicitly prohibit the following trade
restrictive and distortive measures:
• LocaL content requirement
Mandatory use of local outputs in
production.
4. #
• Trade balancing requiremenT
Imports to be maintained at specific
proportion of exports.
• Foreign exchange balancing
requiremenT
Forex made available for imports to
equal a certain proportion of value of
forex from exports.
5. #
• exchange resTricTions
Free access to forex curbed, resulting in
import restrictions.
• exporT perFormance requiremenT
Certain proportion of production should
be exported.
6. #
The agreement provides for transitional
period for elimination of prohibited
trims, wef. January 1, 1995
• 2 years For developed
counTries.
• 5 years For developing
counTries, and
• 7 years For TransiTional and
leasT developed counTries.
7. #
• Before 1991, India is used to have local
content requirements in the form of the
phased manufacturing program(PMP).
This has been scrapped now.
• Export commitments exist in the form of
dividend- balancing requirement that is
imposed for FDI in consumer goods.
8. #
• Although TRIMS are prohibited under
certain conditions. India had such a
cover till 2005 but later, scraped all
these measures to escape from TRIMS.
9. #
• According to the agreement,
• The governments cannot impose
measures which require particular
levels of local procurement by an
enterprise.
• It also discourages measures which
limit a company’s imports or set of
targets for the company to export.
