India appeals against WTO ruling on sugar export subsidies

India has appealed against a ruling of the World Trade Organization’s (WTO) trade dispute settlement panel which ruled that the country’s domestic support measures for sugar and sugarcane are inconsistent with global trade norms. The appeal was filed by India in the WTO’s Appellate Body, which is the final authority on such trade disputes.

India has stated that the WTO’s dispute panel ruling has made certain “erroneous” findings about domestic schemes to support sugarcane producers and exports and the findings of the panel are completely “unacceptable”.

The panel in its ruling on December 14, 2021 recommended India to withdraw its alleged prohibited subsidies under the Production Assistance, the Buffer Stock, and the Marketing and Transportation Schemes within 120 days from the adoption of this report.

Ruling in favour of Brazil, Australia and Guatemala in their trade dispute against India over New Delhi’s sugar subsidies, the WTO panel has stated that the support measures are inconsistent with WTO trade rules.

In 2019, Brazil, Australia and Guatemala dragged India into the WTO’s dispute settlement mechanism alleging that New Delhi’s domestic support measures to producers of sugarcane and sugar and export subsidies are inconsistent with global trade rules including various provisions of the WTO’s Agreement on Agriculture, Agreement on Subsidies and Countervailing Measures, and the General Agreement on Trade and Tariffs (GATT).

Brazil is the largest producer and exporter of sugar in the world. India is the world’s second largest sugar producer after Brazil. In December 2020, the government had approved a subsidy of Rs 3,500 crore to sugar mills for the export of 60 lakh tonnes of sweetener during the ongoing marketing year 2020-21 as part of its efforts to help them clear outstanding dues to sugarcane farmers.

In the previous marketing year 2019-20 (October-September), the government had provided a lump sum export subsidy of Rs 10,448 per tonne. Mills exported 5.7 million tonnes of sugar against the mandatory quota of 6 million tonnes set for the 2019-20 season (October-September), according to official data.

These three countries, which are members of the WTO, had complained that India’s support measures to sugarcane producers exceeds the minimum level of 10 per cent of the total value of sugarcane production, which according to them was inconsistent with the Agreement on Agriculture.

Leave a Reply

Your email address will not be published. Required fields are marked *