WTO rules against India’s sugar subsidies

The World Trade Organization this week ruled that India’s sugar subsidy regime violates its obligations under its membership in the World Trade Organization.

A WTO dispute panel initiated by Australia, Brazil and Guatemala in early 2019 investigated India’s massive sugar subsidy regime and found it was not compatible with New Delhi’s WTO commitments.

The panel released its findings on Tuesday.

In an analysis, the American Sugar Alliance, which represents U.S. cane and beet producers, noted that India is one of the largest sugar producers in the world, producing more than 30 million tons of milled sugar in most years with the support of government production subsidies and also uses export subsidies to place 6 to 7 million metric tons of sugar on the world market.

ASA noted that the panel found that India’s provision of domestic support to its sugarcane producers vastly exceeds the level permitted under the terms of relevant provisions of the Agreement on Agriculture and the Agreement on Subsidies and Countervailing Measures.

“India has not been playing by the rules for years to the detriment of other sugar producers,” said Rob Johansson, director of Economics and Policy Analysis at the American Sugar Alliance (ASA).

“This case focused on domestic sugar and export subsidies provided by India since 2014 and illustrates how much time these actions currently require to play out. We can now anticipate that India will use every procedural tool at its disposal in Geneva to drag the case out even longer.”

“Our industry has long advocated for the verified elimination of all global sugar subsidies,” said ASA Chairman Luther Markwart. “The panel’s finding in the India case serves as a stark reminder of just how far we have to go in achieving that objective.”

But Reuters said in a report that “India could sell more than 6 million tons 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.”


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