WTO Dispute Settlement Panel to review India’s Sugar Subsidy

The World Trade Organisation (WTO) has announced setting up of dispute settlement panel to review India’s sugar subsidy as requested by Brazil, Australia and Guatemala.

What are the Objections against India?

The countries allege that:

• India has massively increased the level of domestic support under its support regime for sugarcane and sugar.
• India has almost doubled the fair and remunerative price for sugarcane from Rs 1,391.2 per tonne in 2010-11 to Rs 2,750 per tonne in 2018-19. The fair and remunerative price is the minimum price that, under Indian law, domestic sugar mills must pay sugarcane producers. It constitutes one of India’s most important support measures for sugarcane producers.
• Some of the Indian states also provide for higher minimum prices for sugarcane that local sugar mills must pay local sugarcane producers.
• The measure by the Indian government has resulted in a negative impact on global market prices for sugar and their sugar producers.

India has countered these allegations by stressing that the support measures were intended to provide for and avoid the over-exploitation of, 35 million vulnerable, resource-poor farmers in the country.

WTO Dispute Settlement

The request for consultations is the first step in a dispute under the WTO dispute settlement process. It gives parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation.

If consultations fail to resolve the dispute within 60 days, the complainant may request adjudication by a panel.

If the parties are not satisfied with the outcome of the dispute settlement panel, the countries can approach the appellate body of the WTO’s dispute settlement mechanism.