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India will appeal a ruling by the World Trade Organization (WTO) in a dispute raised by Brazil, Australia and Guatemala that New Delhi offered support to sugarcane growers in excess of the permitted level.

The ministry of commerce and industry said in a statement on Tuesday that a WTO panel’s findings were “erroneous" and “completely unacceptable" to India and that they won’t impact the country’s existing and ongoing policy measures in the sugar sector.

“India has initiated all measures necessary to protect its interest and file an appeal at the WTO against the report, to protect the interests of its farmers," said the ministry.

According to the findings of the WTO panel posted on its website, India provided non-exempt product-specific domestic support to sugarcane growers in excess of the permitted level of 10% of the total value of sugarcane production. “Therefore, we find that India is acting inconsistently with its obligations under Article 7.2(b) of the Agreement on Agriculture," showed a WTO document.

WTO also recommended that India withdraw “its prohibited subsidies under the Production Assistance, the Buffer Stock, and the Marketing and Transportation Schemes within 120 days from the adoption of our report".

“The findings of the panel are completely unacceptable to India. The panel’s findings are unreasoned and not supported by the WTO rules. The panel has also evaded key issues which it was obliged to determine. Similarly, the panel’s findings on alleged export subsidies undermines logic and rationale," said the commerce ministry statement.

India believes that its measures are consistent with its obligations under the WTO agreements, it said.

The dispute dates back to 2019 when Brazil, Australia and Guatemala filed parallel complaints at the World Trade Organization that alleged the Indian government massively increased its sugar subsidies and reintroduced a minimum price for sugar, which led to increased production of sugar that outstripped domestic demand, news agency Bloomberg had said in a report on Tuesday.

The nations also contested the legality of India’s decision to assign minimum export quotas for domestic sugar mills and other export incentives that they said distorted world market prices, the report said.

The commerce ministry statement said that Australia, Brazil and Guatemala wrongly claimed that domestic support provided by India to sugarcane growers was in excess of the limit allowed by the WTO and that India provided prohibited export subsidies to sugar mills.

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