World Trade Organization (WTO) members, especially the US, have questioned India on various subsidy schemes like RoDTEP, a key export tax refund scheme, Agriculture Infrastructure and Development Cess (AIDC), subsidy on crop loans, import duty on cotton and ban on onion exports.
Seeking “an update on the operational status and guidelines” of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, Washington wants New Delhi to “provide an explanation of this measure, including what specific duties and taxes are eligible for refund for agricultural products such as rice”. “If operational, please list what agricultural products are eligible under this measure,” it says.
From 1 January, 2021, the RoDTEP scheme replaced the Merchandise Exports from India Scheme (MEIS), which was successfully challenged by the US at the WTO on ground of being inconsistent with global trade norms. India has appealed against the ruling of the WTO’s dispute body and a verdict is yet to be heard.
The US has asked India to clarify if the AIDC would apply to the specified agricultural products produced and sold domestically and for how long does the government intend to continue with it. The US has also posed queries on India’s export subsidy in the sugar sector, seeking details of how this programme is implemented. It highlighted that in December 2020, the Indian government had approved sugar export subsidies of Rs 3,500 crore for the marketing year 2020-21 to ship out six million tonnes of sugar.
Washington has also sought a reply as to how the interest subvention scheme is implemented in short-term crop loans. “What commodities benefit from each scheme included in the notified measure ‘interest subsidy’?” it asks.
Australia has sought to know the domestic market circumstances and policy considerations that led to a 10 per cent tariff being imposed on cotton imports. “Whether India expects further tariff increases on cotton or the introduction of other measures to limit imports of cotton?” it asks.
Japan wants India to explain as to how the government has given due consideration to the effects of an onion export ban on importing countries’ food security.