Indian cotton subsidy bothers US

The US cotton industry has expressed its concern over subsidies being provided by the Indian government to its cotton growing farmers, alleging it is in violation of the World Trade Organisation’s (WTO) norms.

Testifying before the US International Trade Commission hearing on “India: Effects of Tariffs and Non-Tariff Measures on US Agricultural Exports”, the National Cotton Council — the nodal agency of the US cotton industry — has sought the administration’s help in this regard. “The lack of transparency in the operation and scope of India’s subsidy programme is a major impediment to trade. Despite India’s membership in the WTO, it has repeatedly failed to notify its support levels to WTO,” Gary Adams, of the National Cotton Council, said.

The special hearing was convened at the direction of the US Senate Committee on Finance. Adams urged the US government that it should continue to press India to make these submissions.

“The export subsidy (to cotton farmers) programme will support India’s internal prices while artificially increasing its competitiveness in world market,” he argued. “The addition of an export subsidy (to 3-5 per cent discount) allows India to increase the discount relative to their competitors,” Adams said.