India has firmly opposed a joint counter notification submitted by the US and Australia at the WTO alleging that its sugar subsidies breached WTO norms by a wide margin. It questioned the methodology used for calculating the subsidies and argued against the use of the rupee in making the calculations on the ground that the currency was “heavily” impacted by inflation, sources said.

“New Delhi also countered charges made by the US and Australia on non-inclusion of sugar subsidies in its subsidy notifications at the WTO stating that the government was not involved in the process,” a Geneva-based trade official told businessline.

The joint counter notification, discussed at an agriculture committee meeting of the WTO last week, however, was “strongly supported” by Brazil, Canada, Costa Rica, Paraguay, New Zealand, the EU, and Guatemala, the official added. 

The US and Australia counter notification highlighted that over the four-year period from 2018-19 to 2021-22, India provided market price support (government subsidised prices) on sugarcane which was 92 per cent-101 per cent of the total value of sugarcane production against the limit of 10 per cent of total value of production set out in the WTO’s Agreement on Agriculture (AoA).

The two pointed out that their counter notification was based on a dispute against India in 2018, which was ruled on in 2021 but remained unresolved after India appealed the case to the  Appellate Body which is not functional because of non-appointment of judges

At the meeting, India heavily defended its position on the sugar subsidies. “Firstly, India said that 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,” the source said.

India then questioned Australia and the US on its insistence on using the Indian rupee for calculations. “India pointed out that it generally did not use the Indian rupee for its notifications at the WTO (the US dollar is the denomination mostly in use). Moreover, given that the rupee was heavily impacted by inflation, there was no question of using it in the calculations,” the source said.

Responding to demands made by the US and Australia, as well as the seven members supporting them, on timely notifications on the subsidies, India said that it was not obligated to do so.

“India also that the India’s Central government as well as the State governments did not procure sugarcane from farmers neither pay them.  All purchases were made by private sugar mills. Therefore, the notifications on domestic support did not include this information,” the source said.

Per calculations made by US-Australia quoting publicly available information, the paper concluded that India’s Market Price Support in 2018-19, 2019-20, 2020-21 and 2021-22 was $15.9 billion, $14.6 billion, $16.5 billion and $17.6 billion respectively. This constituted over 90 per cent of the value of production of sugar every year against the permitted level of 10 per cent.