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MUMBAI/NEW DELHI : India could sell more than 6 million tonnes of sugar on the world market this year with a World Trade Organization ruling that it flouted the rules by offering export subsidies unlikely to have an impact on overseas sales, trade officials said.

Robust sugar exports from the world's second biggest producer could keep a lid on global prices, which are currently trading near their highest level in 4-1/2 years because of lower output in top producer Brazil.

On Tuesday, a World Trade Organization panel ruled in favour of Brazil, Australia and Guatemala in a trade dispute with India dating back to 2019 over sugar subsidies and asked New Delhi to conform with global rules.

"There is no export subsidy for sugar as of now and therefore there is absolutely no impact of the order of the WTO panel with regard to Indian sugar exports," said Abinash Verma, director general of the Indian Sugar Mills Association (ISMA), a body of top private sugar producers.

For the current 2021/22 marketing year, India dropped an export subsidy in place for the last three years. The subsidy helped Indian mills to export a record 7.2 million tonnes of sugar in the 2020/21 season.

The rival producers said that New Delhi had broken WTO rules by providing excessive domestic support and export subsidies for sugar and sugarcane.

India will appeal the WTO's decision but could continue with its existing policies until a final ruling, Verma said, citing the trade organisation's rules.

Indian sugar mills are already contracted to export 3.5 million tonnes of sugar this year and could ultimately export more than 6 million tonnes, said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories Ltd.

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