WTO members ask India to remove raw sugar export subsidy immediately

Australia has asked India to remove export subsidies immediately. It said the 3,300 rupees per tonne incentive payment is the equivalent of 14-16% of the world price. Since India is the third largest exporter of sugar this threatens to seriously distort trade. It said that the amount envisaged could potentially finance all its own exports half way across the Pacific Ocean.

Australia, Colombia, Brazil and the EU asked India about a new policy announced in February involving incentive payments to Indian sugar exporters. Members sought to know the legal basis for extending the export subsidy under the WTO regime. Several pointed out that India has agreed not to subsidize exports.

In a reply to this India said, The policy was designed to encourage diversification away from white sugar to raw sugar and that no intervention payments have been paid yet. India said export subsidies will be notified to the WTO.

India's new support programme for sugar sparked comment among a number of delegations with some urging India to remove immediately what they described as export subsidies that will potentially impact world trade, WTO said.

The Agriculture Agreement allowed developing countries to subsidize marketing costs and internal transportation costs during the agreement's implementation period. Brazil asked how India could justify the subsidies since there has been no consensus to extend these special provisions for developing countries.

Sharing the concerns were Paraguay, Thailand, El Salvador, Canada, the US, Pakistan and New Zealand.

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