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India will be under increased pressure at the WTO to do away with its export subsidies, as the EU and Canada have expressed interest in joining the consultations sought by the US on the matter with the country.
“Both the EU and Canada have said that they have substantial trade interest in the matter and want to participate in the discussions, as they export a number of industrial products that are allegedly subsidised by India. They expressed concerns on the possibility of the export sops affecting global prices and trade flow,” a government official told BusinessLine .
Earlier this month, the US had complained to the WTO about six “export subsidy” programmes run by the Indian government which “harm American workers by creating an uneven playing field.” It argued that as per WTO rules, India no longer qualified to give export sops as its per capita Gross National Income had stayed over $1,000 for three consecutive years.
New Delhi seeks time
New Delhi, however, believes that it needs to be given eight years to phase out the subsidies, as that was the time period given to members at the time of implementation of the Agreement on Subsidies and Countervailing Duties in 1994-95. The argument given by India since 2011 is yet to find favour at the WTO.
In its submission, the EU pointed out that it exported on average over the last three years, polyethylene, stainless steel bars/wires, tubes and pipes of cast iron and graphite electrode systems (which together make up only a subset of the allegedly subsidised product sectors) for over €1.1 billion per year. “The measures referred to in the consultation request may have a substantial impact on the price of industrial goods concerned in the world market and affect trade flows in these products,” it said.
Canada, which also gave its submission to the WTO’s dispute settlement body, pointed out that India was an important trading partner and goods imports have steadily increased between 2008 and 2017, from $2.24 billion to $4.16 billion.
“The measures at issue in the consultations request cover a wide range of products and could impact the conditions of competition not only in Canada, but for Canadian like products in third-country markets,” it said.
The programmes challenged by the US include the popular Merchandise Export from India Scheme, Export Promotion Capital Goods Scheme, the Electronics Hardware Technology Park Scheme and the Special Economic Zones. The value of the schemes has been pegged by the US Trade Representative’s office at $7 billion.
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