India has blocked requests from Australia, Brazil and Guatemala at the World Trade Organization (WTO) for setting up of dispute panels against its subsidies for sugar and sugarcane.

“At a meeting of the Dispute Settlement Body (DSB) of the WTO on Monday, New Delhi argued that its programmes were in line with its WTO obligations and urged the three countries to continue talks aimed at arriving at a mutually agreed solution,” according to a Geneva-based trade official.

The three can renew their request at the next regular DSB meeting scheduled for August 15. India cannot block their second request as it is not permitted under WTO rules.

The complaining countries have alleged that the amount of support to agricultural producers is in excess of India’s product-specific de minimis level of 10 per cent for sugarcane.

Sore points

They also said several subsidies such as the State-level export subsidy for sugar, federal-level assistance and export incentives (raw sugar export incentive scheme), and freight assistance were inconsistent with the Agreement on Agriculture (AoA) as they appeared to be export subsidies.

If India cannot reach an understanding with the three over the next three weeks, the DSB is expected to agree to the establishment of three separate panels to hear out the dispute.

Depending on the verdict of the panels, which takes several months, India would either be free to continue with its subsidy programmes for sugar and sugarcane or swap them with ones that are in consonance with the WTO rules.

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