BackIndia shouldn’t be singled out on export subsidies: Suresh Prabhu
India should be given a chance to phase out export subsidies over a period of eight years, as was the case with other countries, says commerce minister Suresh Prabhu at the Rising India Summit
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New Delhi: A day after the US dragged India to the World Trade Organization (WTO) over its export subsidy programmes, trade minister Suresh Prabhu on Friday said India should not be singled out just because it is growing faster, and should be given a chance to phase out export subsidies over a period of eight years, as was the case with other countries.
Speaking at the Rising India Summit, Prabhu said India follows all international norms in letter and spirit. “We will follow the international obligations but obligations should also be such that they take into consideration the reality of the situation. So if you have given it to somebody else, you must give it to India," he said.
Under the special and differential provisions of the WTO’s Agreement on Subsidies and Countervailing Measures, so-called least-developed countries and developing countries whose gross national income (GNI) per capita is below $1,000 a year at the 1990 exchange rate are allowed to provide export incentives to any sector that has a share below 3.25% in global exports. However, they need to stop all export incentives if per capita GNI crosses $1,000 for three straight years.
According to a notification by the Committee on Subsidies and Countervailing Measures in 2017, India’s per capita GNI crossed $1,000 for three consecutive years in 2015.
Without taking any names, Prabhu said some countries have exceeded the $1000 per capita limit but are not being subjected to any regulation. “So it should not single out India alone because we are growing," he added.
A commerce ministry official, speaking on condition of anonymity, said countries like South Korea and Indonesia are still providing some export subsidies though their per capita GNI crossed the $1000 mark much before India’s.
Prabhu said that when the rule was made, countries that were already above $1000 were given eight years to adjust to the new regime. “Whereas when we exceed in 2017, we should also be subjected to the same regulation. We should also get eight years. There is an ambiguity about it. We have been raising this issue," he said.
The commerce ministry, Prabhu said, has already started preparations for making India’s incentives to its exporters WTO compliant. “So this is not something that has taken us by surprise," he added.
Prabhu said he has already approved a draft national industrial policy which will soon be put out for stakeholder consultation.
Also speaking at the Rising India event, State Bank of India chairman Rajnish Kumar said the high level of bad loans in the public sector banks is not unique to India. “Historically, countries like the US, Japan and China which faced developmental challenges have seen high levels of non-performing assets," he said.
However, he conceded that public sector banks need to introspect on how to set things right. “It is the responsibility of the bankers to put their risk management and house in order," he added.
Deep Kalra, founder of MakeMyTrip, said it is easier to do business for a foreign company in India than for an Indian company. “You can have your domicile overseas and you can bill Indians and not pay taxes," he added.
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