India offered sugarcane sop vastly in excess of WTO limits: US and Australia

New Delhi: US and Australia alleged India of giving subsidies to sugarcane farmers far exceeding limits set in global trade norms.

The two countries told the WTO that they estimated that over the period 2018-19 to 2021-22, New Delhi provided sugarcane subsidy between 91-100%, which was “vastly in excess of the limits set out” at 10% of value of food production in the case of India and other developing countries. These subsidies or domestic support is called aggregate measurement of support (AMS) in trade parlance.

The two countries, in a submission to WTO on Monday, claimed India has not included sugarcane or its derived products in any of its domestic support notifications since marketing year 1995-96 and therefore, the global trade organisation has not been given any information by New Delhi to compare with the findings of the submissions by US and Australia. The October to September period is the marketing year for sugarcane in India.

The development follows Brazil, Australia and Guatemala dragging India to the WTO’s dispute settlement mechanism in 2019 alleging that New Delhi’s sugar subsidies are inconsistent with global trade rules. They had also flagged India’s alleged export subsidies, subsidies under the production assistance and buffer stock schemes, and those under marketing and transportation schemes.

A WTO panel in 2021 confirmed the claims and India appealed the findings, preventing the panel’s report from being adopted by the global trade watchdog’s Dispute Settlement Body.