Photo: AFP
Photo: AFP

India rejects US charge on price support steps breaching WTO rules

The US specifically targeted the minimum support prices provided by India which enable states and the central government to sustain/undergird its public distribution programmes

Geneva: India has categorically rejected a counter notification from the US that India’s market price support (MPS) programmes for wheat and rice breached New Delhi’s allowable levels of trade distorting domestic support at the World Trade Organization (WTO).

In the 12-page counter notification circulated on 9 May, the US alleged that India spent vastly in excess of its scheduled commitments for wheat and rice by breaching its de minimis limit of 10%.

The US counter notification, the first of its kind since the trade body was established in 1995, claimed that “India’s apparent market price support for wheat appears to have been over 60% of the value of production in each of the four years (between 2010 and 2013) for which India has notified data." India’s “apparent MPS for rice appears to have been over 70% of the value of production in each of the past four years ," according to the notification.

Although India recently notified its domestic subsidies for around 20 agricultural products, the US specifically targeted the two most sensitive items by saying that “India appears to be providing significant market price support, both in terms of absolute value and as a percentage of the value of production, for wheat and rice."

The US specifically targeted the minimum support prices provided by India which enable states and the central government to sustain/undergird its public distribution programmes. It also alleged that India has become a significant exporter of rice and wheat in the international market.

“The United States expects our trading partners to comply with the reporting requirements they agreed to when joining the WTO," said US Trade Representative Robert Lighthizer on 9 May.

“India represents a massive market, and we want greater access for US products, but India must be transparent and about their practices," US agriculture secretary Sonny Perdue said.

In a sharp response, India’s trade envoy J. S. Deepak said “India has already rejected it because of the flawed assumptions and erroneous methodologies used by the US for its calculations."

“During my meeting with US chief agriculture negotiator Gregg Doud in Geneva on 4 May, I told him categorically the US’s counter notification is baseless." Besides, “I asked the US to submit its notification before finding fault with other countries’ notifications."

“The US’s counter notification vindicates why the US had blocked India’s core demand for the permanent solution for public stockholding programmes at Buenos Aires in last December," said an agriculture trade analyst from Paris, who asked not to be identified.

Close