India may lose trade battle with US on export subsidy at WTO: Teaotia

Our Bureau Kolkata | Updated on July 19, 2018

Commerce and Industry Secretary Rita Teaotia speaking at an interactive session in Kolkata on Thursday   -  Debasish Bhaduri

Has crossed income threshold to be able to give such sops: Commerce Secretary

Commerce and Industry Secretary Rita Teaotia on Thursday said India may lose the battle with the US on trade disputes relating to export subsidy as it has crossed the income threshold to be able to give direct export-linked subsidies.

It may be noted that India was dragged to the World Trade Organisation’s (WTO) dispute settlement mechanism by the US over export subsidies.

“We have a whole lot of challenges in the WTO. We get atleast one dispute a month and we respond strongly. But there is every possibility that this one dispute (export subsidy) we will lose because India has crossed the income threshold to be able to give direct export-linked subsidies,” Teaotia said at an interactive session organised by the Indian Chamber of Commerce here.

According to her, while anything which is a refund of statutory levy is ‘legitimate’, an incentive being given only because someone is exporting is ‘not legitimate’.

“We have an expert group studying to see what the WTO-compliant supports are and what the practices are globally. This exercise is almost complete. In fact, we are having the first round of presentation next week. Hopefully, we will have a draft set of schemes for discussion in a month or so,” she said.

Tea auction platform

On the need to revamp the tea auction platform, Teaotia said, the Tea Board has been working on improving the ‘acceptability’ of the auction platform.

Only about 50 per cent of the tea produced in the country comes for the auctions, as compared to close to 100 per cent in countries like Africa, she said and added, “Currently the acceptability of the auction platform is not too high. The Tea Board is interacting with different parts of the industry to understand how it can be made more acceptable.”

According to Azam Monem, Chairman of Indian Tea Association (ITA), discussions are on to see how auctions can be revamped to make them more ‘user-friendly and cost-effective’.

“Currently transaction costs are too high primarily because of transportation and warehousing. While discussions are at very initial stages, talks are on to see if we can have an ex-estate model which can bring down warehousing costs,” he told BusinessLine.

Possibilities are also being explored to see if it would be feasible to have one common auction platform and link it to various sourcing points, he said. There are three auction centres in South India and three in the North at present.

Published on July 19, 2018

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