Australia and Guatemala have requested the World Trade Organisation (WTO) to
set up dispute panels to rule on India’s sugar subsidies the second time round
after India rejected the request at the last meeting of the Dispute Settlement
Body (DSB) last month.
for dispute settlement panels put in by the three countries will be taken up at
the DSB meeting scheduled on August 15. Since the second request made to the
DSB cannot be rejected, panels are now likely to be formed at the WTO which
will decide whether India’s sugar subsidies are valid or not.
India said all subsidies given to sugar
producers permissible under WTO rules
tried to reason with the three complainants pointing out that all subsidies
extended by the government to sugar producers were permissible under the WTO
rules. However, the discussions were not successful,” as reported in a local
DSB considers the second time requests and sets up three separate panels, all
sides will put forward their arguments.
to Australia, the amount of support to sugarcane producers in India exceeds the
country’s product-specific de minimis level of 10 per cent for the product
They argued subsidies inconsistent with
Agreement on Agriculture
. It added
that several subsidies such as the State-level export subsidy for sugar,
federal-level assistance and export incentives (raw sugar export incentive
scheme), and freight assistance were inconsistent with the Agreement on
Agriculture (AoA) as they appeared to be export subsidies.
decision to increase the Fair and Remunerative Price for sugarcane from ₹1,391.2 per
tonne in 2010-11 to ₹2,750 per tonne in 2018-19 was the main reason for
Brazil’s concern which also believed that making it compulsory for mills to
export 5 million tonnes of sugar in 2018-19 had distorted prices in the global
also had similar complaints and alleged that India’s domestic support measures
for sugar are inconsistent with obligations under the WTO’s AoA, while the
alleged export subsidies are inconsistent with India’s obligations under the
AoA and the Agreement on Subsidies and Countervailing Measures (SCM Agreement).
hopeful to get a favorable judgment from the panel
has consistently argued that its subsidies to sugar producers were in the form
of production subsidies that were permissible under the WTO. Moreover, the
subsidies to exporters were for transportation and marketing purposes which,
were permitted by the WTO at least till 2022.
hopeful that once the panels are set up our arguments would be appreciated and
we would get a favorable judgment,” an official said.