India failed to inform the WTO committee of its sugar export subsidies, in violation of a separate agreement.
A WTO panel on Tuesday ruled in favor of Brazil, Australia and Guatemala in its trade dispute with India over sugar subsidies and asked New Delhi to comply with global rules.
In cases brought before the WTO in 2019, rival producers alleged that India broke WTO rules by providing excessive domestic support and export subsidies for sugar and sugarcane.
“We recommend that India bring its WTO-incompatible measures in line with its obligations under the Agriculture Agreement and the SCM (Subsidy and Countervailing Measures) Agreement,” the panel said.
India, the world’s second-largest sugar producer after Brazil, said later on Tuesday that it would appeal against the findings of the panel’s 115-page report.
However, the appeal will go into a legal vacuum as the appellate body in the WTO’s apex chamber does not have enough judges to function.
The World Trade Organization report said that for five sugar seasons between 2014-15 and 2018-19, India provided domestic support to its sugarcane growers in excess of the maximum level of 10 per cent allowed by the global agriculture deal.
It also said that India failed to inform the WTO committee of its sugar export subsidies, in violation of a separate agreement.
However, the panel did not uphold one of Australia’s allegations that India had maintained buffer sugar stocks which should have been reported to the World Trade Organization in the 1990s.
The Ministry of Commerce and Industry said in a statement that the panel’s report was “unacceptable” and would have no impact on ongoing Chinese policies. It said the WTO’s findings were “wrong” and “inappropriate”.
Brazilian sugar industry group Unica said the report recognized trade distortions caused by India’s sugar policies.
It said Brazil and India are cooperating on issues such as the use of sugarcane-based ethanol and believed that the two countries would find a “collaborative solution” to the issue.
It may take time for WTO decisions to have any effect on trade. But if the verdict is upheld after appeal, the winning side could be awarded retaliatory measures such as imposing heavy duties on imports from the country found guilty.
,