WTO Finds India's Sugar Subsidy Inconsistent With Global Norms

A World Trade Organization (WTO) dispute panel said on Tuesday that India's sugar sector assistance measures are inconsistent with global trade norms, However, New Delhi has described it as “totally unacceptable” to the country.

Brazil, Australia, and Guatemala dragged India into the WTO's dispute settlement process in 2019, claiming that New Delhi's sugar subsidies to farmers violate global trade laws. Brazil is the world's largest producer and exporter of sugar.

According to a WTO statement, the panel's reports on the cases brought by Brazil, Australia, and Guatemala in 'India — Measures Concerning Sugar and Sugarcane' was circulated.

The WTO panel stated its conclusion and recommendation on the complaints by 3 nations that "we assess that India is behaving inconsistently with its commitments under Article 7.2(b) of the Agreement on Agriculture."

It has recommended India to bring its "WTO-inconsistent" measures into conformity with its obligations under the Agricultural Agreement.

"We conclude that, to the extent that the measures at issue are inconsistent with certain provisions of the Agreement on Agriculture, they have nullified or impaired benefits accruing to Brazil under that Agreement".

Commenting on the development, India said that there would be no impact of WTO panel's findings on sugar on any of India's existing and ongoing policy measures in the sugar sector.

According to an official statement, India has taken all necessary steps to preserve its interests, including filing an appeal with the World Trade Organization against the report in order to protect the interests of its farmers.

It said that these nations had "wrongly claimed" that India's domestic assistance for sugarcane producers exceeds the WTO's limit and that India offers prohibited export subsidies to sugar mills.

In its report, the panel made many "erroneous" conclusions concerning India's plans to boost sugarcane growers and exporters.

The results are "totally unacceptable" to India, according to the statement, adding that the panel's findings are unreasoned and not supported by WTO regulations.

"The Panel has also evaded key issues that it was obliged to resolve. Similarly, the panel's findings on alleged export subsidies undermines logic and rationale. India feels that its measures are in accordance with its obligations under WTO agreements "it added.

According to WTO rules, a WTO member or members may file a case with the Geneva-based multilateral body if they believe that a certain measure violates WTO norms.

Bilateral consultation is the first step to resolve a dispute. If both the sides are not able to resolve the matter through consultation, either can approach for the establishment of a dispute settlement panel.