Brazil,Australia and Guatemala’s has requested World Trade Organization (WTO) to set up a Dispute settlement panel(DSB) against India’s sugar subsidies.
The countries have said that most subsidies to sugar producers in India violate WTO rules.Several subsidies such as the State-level export subsidies for sugar,Central assistance and export incentives were inconsistent with the WTO rules.
The countries have also complained that India has almost doubled the Fair and Remunerative Price for sugarcane and pointed out that mandating the mills to export 5 million tonnes of sugar in 2018-19 had led to substantial pricing pressures on world market prices.
However,India is likely to point out that most of its subsidies to sugar producers were in the form of production subsidies that were permissible under the WTO.
Moreover,the subsidies to exporters given for exports were for transportation and marketing purposes which are permitted by the WTO.
Further,India is likely to block the request for a panel when it is taken up by the DSB in its meeting as India believes that it has not violated WTO rules.
WTO allows panel requests to be blocked by the affected member once and if the complainants persist and the same request is given for a second time,then the dispute settlement panels are set up.