Global Economy

Brazil, Canada, EU urge India to submit timely notifications on sugar subsidies in WTO

A group of WTO member countries, including Brazil, Canada and the European Union, have urged India to submit timely notifications on sugar subsidies in the World Trade Organisation, an official said. The issue came up for discussion during the meeting of the WTO’s agriculture committee on May 23-24 in Geneva. These countries are also major sugar exporters like India and they allege that support measures by India distort global sugar trade.

Brazil, Canada, Costa Rica, Paraguay, New Zealand, the EU, and Guatemala have “urged India to submit timely notifications on the subsidies”, the Geneva-based official said.

India has stated that the Indian central and state governments neither paid for nor procured sugarcane from farmers, as all purchases were made by private sugar mills, hence, this information was not included in its notifications of domestic support.

The discussion assumes significance as in 2022, 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 and is not functioning. Brazil, Australia, and Guatemala had filed the cases against India on these support measures. In its appeal, 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” to it.

The US and Australia have also presented a joint counter notification regarding India’s sugar subsidies.

According to their study, over the four-year period from 2018-19 to 2021-22, India has provided market price support on sugarcane in excess of the limits set out in the Agreement on Agriculture (10 per cent of the total value of sugarcane production) by a margin of 92-101 per cent.

They claimed that India failed to report any of these subsidies in its past notifications since 1995, the official said.

Brazil, Canada, Costa Rica, Paraguay, New Zealand, the EU, and Guatemala voiced support for the counter notification.

India has said it refused to consider the methodology used in the 2018 dispute as the basis for discussion, given that India has appealed the case to the appellate body.

New Delhi has also questioned why Australia and the US insisted on using the Indian rupee for calculations, given that the currency was heavily impacted by inflation.


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