WTO: India finally accepts G-33 proposal on MSP doles

Amiti Sen New Delhi | Updated on September 18, 2021

Good to stick with the decision of the developing alliance, say experts

After a long deliberation of over a month, India has finally decided to co-sponsor a proposal made by the G-33 group of developing countries on a permanent solution for allowing public stockholding subsidies without limits at the WTO.

“In a revised G-33 proposal on public stockholding submitted to the WTO on September 16, India too became a signatory, which added significant weight to the submission,” according to an official.

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New Delhi took its time in endorsing the proposal, submitted first by the G-33 on July 28, as it may not have been keen on giving explicit commitment on not exporting from procured stocks due to possible complications in the future, say experts.

Many are of the opinion that it was a good decision by the Indian government to stick to the G-33 alliance as the grouping has served its interests well over the last many years.

“The government has taken the right step by not disassociating with the G-33 grouping which it was instrumental in forming and which has been representing developing country interests so well,” said Biswajit Dhar, Professor, JNU.

Priority issues

Commerce Minister Piyush Goyal virtually participated in the G-33 Informal Ministerial Conference on September 16, hosted by Indonesia, to discuss the agricultural priority issues and the way forward for the Twelfth Ministerial Conference (MC-12) scheduled during November 30–December 3, 2021.

The Minister stressed that the WTO Agreement on Agriculture was tilted in favour of developed countries and said that the G-33 must strive for positive outcomes on permanent solution to public stock-holding for food security purposes which is of utmost importance, finalisation of a Special Safeguard Mechanism (SSM) and a balanced outcome on Domestic Support.

Also see: WTO talks: India wants exemption from curbs on subsidy for fishers

The WTO rules consider subsidy provided for public procurement, including for MSP programme, in the category of trade distorting support, which has to be maintained within a fixed ceiling of 10 per cent of the value of production. India, individually and as part of the G-33, has been fighting for the flexibility to give higher MSP, preferably without any limits.

While there is a peace clause that all members agreed to in 2013 that prevents legal action against developing countries by other members in case the ceiling is breached, there are numerous onerous conditions attached to it and developing countries, thus, want a permanent solution to the issue.

“India has always been part of the G-33 group and is in full agreement with the main content of its proposal which talks about WTO members not challenging support provided by developing countries to fund public stock-holding programmes, like MSP, for food security purposes. It may have some trouble with the provision of not exporting from stocks as it could be difficult to prove, but that could be handled later,” another Delhi-based trade expert pointed out.

Published on September 17, 2021

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