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India Criticized at WTO for ‘Not Answering Questions’ on MSP Subsidies

At the World Trade Organization (WTO), India has been chastised for 'avoiding questions' raised by members about its minimum support price (MSP) programmes for food grains, particularly rice, where subsidies have exceeded prescribed limits, with some alleging that it did not respond adequately to concerns raised by members during consultations.

Shivam Dwivedi
India responded that there was no need for written responses because consultations are generally oral exchanges
India responded that there was no need for written responses because consultations are generally oral exchanges

Countries like the United States, Australia, Canada, the European Union, and Thailand informed the World Trade Organization's agriculture committee that India must respond to concerns about its public stockholding (PSH) programmes.

'India, on the other hand, held firm and insisted on delivering the best possible facts and explanations based on available information during meetings with interested members.' According to the source, it also noted that several of the questions given had already been answered in earlier responses.

The WTO is scrutinizing India's MSP programmes since it is the first country to invoke the Bali 'peace clause' to justify exceeding its 10% (of total rice production) ceiling for rice support in 2018-2019 and 2019-2020.

While the 'peace clause' permits developing nations to exceed the 10% limit without legal penalties from members, it is subject to onerous reporting requirements and other constraints, such as not distorting global trade or risking the food security of other members.

Members of the World Trade Organization, mainly the United States, have accused India of failing to give all essential information in its notifications on a regular basis. Many members had previously argued that, while it was required by the "peace clause" to report all public stockholding programmes, India had not done so, and the country also lacked a proper monitoring mechanism to ensure no stocks were transferred.

New Delhi maintained that it provided information on the value of production (VoP) for a variety of crops and that it was not required to reveal any public stockholding programmes other than for crops where subsidy limits had been exceeded.

During the agriculture committee meeting, the US, Brazil, Canada, Ukraine, Thailand, the European Union, and Australia informed the committee of all questions expressed in their individual consultations with India and suggested that India should respond to the committee rather than evade the questions. According to the source, India responded that there was no need for written responses because consultations are generally oral exchanges, and that it had provided information and clarifications to the best of its capacity.

'India also suggested that it may file a corrigendum to its earlier Bali appendix announcements to provide additional clarifications on lingering member concerns,' the source noted. Countries that were dissatisfied with India's response stated that they were waiting for New Delhi to confirm the second round of consultations with members.

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