India likely to lose sugar subsidy case in WTO
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India likely to lose sugar subsidy case in WTO


India is likely to lose the case over its subsidies on sugar exports, with a World Trade Organization (WTO) dispute panel set to announce its verdict by the end of this month.

The matter was raised by Brazil, Australia and Guatemala in 2019, when the nations requested WTO dispute consultations with India regarding domestic support measures and alleged export subsidies provided by India to producers of sugarcane and sugar, a report in Mint said, adding that India encouraged exports for three years in a row, helping it become a significant and stable exporter of the commodity.

India, the second-largest sugar producer after Brazil, incentivises sugar exports by giving financial support to the sector, which employs over 5 crore farmers in Uttar Pradesh and Maharashtra. India’s position to the WTO has been that it gives the subsidies mainly to small and marginal farmers and in accordance with its commitments at WTO.

It was also recently reported in the media that India plans to withdraw sugar export subsidies from the October crop season as a sharp rise in global prices makes it easier for Indian mills to sell sugar in world markets.

On the case in WTO, Mint quoted a government functionary as saying: “There is not much hope of us winning the case. The report is likely to come up by end-September. But we have the option of going for an appeal and the case may linger on as there is no appellate body at present.”

Earlier this year, WTO members Canada, US and Australia had complained that India had not declared its agriculture export subsidies for more than eight years, while Brazil complained that India’s longstanding support measures for sugar had suppressed global prices by up to 25 per cent and caused losses of around $1.3 billion per year.

According to the Mint report, Australia too expressed concern over “India’s domestic support for sugarcane and its export subsidies for sugar”, and joined “Brazil and Guatemala in initiating a dispute to challenge those measures”.

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