India to appeal WTO ruling against its sugar subsidies
A World Trade Organisation panel ruled that India violated international trade rules when it offered excessive subsidies for the production and export of sugar and sugarcane, reports Bloomberg.
The WTO said India must remove its illegal subsidies within 120 days of the adoption of the report.
Brazil, Australia and Guatemala filed complaints that India massively increased sugar subsidies and reintroduced a minimum price for sugar, which led to increased production that outstripped domestic demand.
India’s policies were inconsistent with WTO rules that govern the levels at which nations can subsidise domestic agricultural production, according to a decision posted on the WTO’s website.
Under WTO rules, India’s sugar subsidies are capped at a de minimis limit of 10 per cent of the value of production.
India – the world’s largest sugar producer after Brazil – has already pledged to refrain from subsidising sugar exports this year due to high global prices. The government previously approved a subsidy of US$475 million for the 2020-2021 growing season.
India can appeal the ruling at any point in the next 60 days, a move that would act like a veto because the WTO’s appellate body is not functioning.
The panel said India violated the WTO agriculture agreement when it provided excessive non-exempt product-specific subsidies to sugarcane producers between 2014 and 2019. The WTO said India must remove its illegal subsidies within 120 days of the adoption of the report.
The findings of the WTO panel are “completely unacceptable,” India’s commerce ministry said, adding its measures on sugar are consistent with its obligations under WTO agreements.
“India has initiated all measures necessary to protect its interest and file an appeal at the WTO against the report, to protect the interests of its farmers,” according to the statement.