India’s MSP operations are compliant with WTO rules: Goyal

The Minimum Support Price (MSP) operation that the government is currently carrying out is “completely compliant’’ with WTO rules as the country is protected by a ‘peace clause’ earlier negotiated, Commerce & Industry Minister Piyush Goyal has said.

On possible changes to the e-commerce policy, the Minister said the Centre was considering certain clarifications to ensure that e-commerce companies worked in the true spirit of the law and rules that had been laid down.

“We have a peace clause for public procurement purposes. We are permitted to buy from the market place. The MSP operations that we are currently doing are completely WTO compliant,” Goyal said at a press conference on Tuesday answering a question on the government’s assurance to farmers on MSP continuation and its implications at the WTO.

Also read India working on new paper based on per-farmer subsidy calculation at WTO

India's MSP for rice is under scrutiny at the WTO with members such as the EU and the US contending that the country has crossed its de minimis limit and also stating that the `peace clause' had not been properly used meeting all given conditions.

Commerce Secretary Anup Wadhawan defended India's subsidies by pointing out that these were mostly within permitted limits and were also much lower than the subsidies given by rich countries. “To the extent, because of public procurement for food security, if we exceed the de minimis limit, we have the peace clause. Our subsidies are within the WTO limit and are moderate compared to what the developed countries give. The distortion caused by developing countries’ subsidies is of minimal quantum compared to the West,” he said.

Also read: Time to re-engineer agriculture subsidies

No change in policy

Elaborating on the government’s stance on e-commerce, the Minister said that while no change in e-commerce policy was being planned per se, there were certain complaints from consumers and small retailers about certain practices of e commerce companies that were under investigation and needed to be addressed.

“We are considering certain clarification to ensure that e-commerce works in the true spirit of the law and as per rules that have been laid down. E-commerce is supposed to provide an agonistic platform so that buyers and sellers can trade with each other. The platform should not become part of the trading transaction,” he said.

The e-commerce companies should not fund transactions, have algorithms which give preference to one over the other or promote their own products, Goyal said. The platform should provide all data that is required for the consumer to make a free and rational choice. “We believe buyers and sellers should be given an opportunity to trade with each other. The platform is only a service provider. Those who break that law will have to respond to our concerns and correct their business practices at the earliest,” he added.

The Minister also talked about developments at the WTO and said that India was happy that Ngozi Okonjo-Iweala was going to be the new Director General. Goyal said that he had several opportunities in the past to interact with her and found her to be very sensitive to demands and requirements of the developing world and the LDCs.

He said that India had a lot of expectations and hoped that the WTO Appellate Body will be put in place quickly and the benefit of special & differential treatment for developing countries will continue either for perpetuity or a long period of time.

On the on-going fisheries negotiations, Goyal said that India believes that subsidy restrictions should be based on ‘polluter pays’ principle so that developing countries have policy space and can continue to give support proportional to that developed countries have been giving for a significant period of time.

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