The Brazilian government on Wednesday asked the World Trade Organization to start a consultation regarding India's sugar industry subsidies, which the South American country says is distorting global trade.
Australia also formalized a similar consultation request challenging the Indian government's subsidies, according to a joint statement from Brazil's foreign relations and agriculture ministries.
Brazil argues that Indian subsidies have caused significant impacts on the world sugar market.
According to the Brazilian government's estimates, India's increased supplies could lead to a drop of as much as 25.5 percent in international sugar prices in the 2018/2019 season.
That would cause losses of up to $1.3 billion for Brazilian exporters alone, the ministries said.
India's sugar production has risen significantly in recent years, with the country poised to overtake Brazil's position as the world's largest producer of the commodity.
In October, Reuters revealed that India is expected to ship sugar for the first time in three years as government subsidies made exports lucrative.
Under WTO rules, if the mandatory consultation fails to produce a satisfactory solution within 60 days, the complainants may request adjudication by a panel.
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