Export sector on edge as US locks horn with India on subsidies

The US' decision to challenge Indian export subsidy schemes at World Trade Organisation (WTO) is an area of grave concern for domestic traders and the government should phase out these incentives, FIEO today said.

US Trade Representative (USTR) Robert Lighthizer has announced that America has requested dispute settlement consultations with India at WTO challenging Indian export subsidy programmes.

"It is a huge concern for export sector and the industry feels that the so called export subsidies should be eliminated gradually," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai told PTI.

He said the US is a major market for domestic exporters as it accounts for about 14 per cent of India's total exports.

According to the US, Indian subsidy programmes harm American workers by creating an "uneven" playing field.

These programs are: Merchandise Exports from India Scheme; Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme, Special Economic Zones, Export Promotion Capital Goods Scheme and Duty Free Imports for Exporters Programme.

Seeking consultation under the aegis of WTO is the first step of dispute settlement process.

If the two nations are not able to reach a mutually agreed solution through consultation, the US may request for a WTO dispute settlement panel to review the matter.

India has already lost two cases in WTO including on poultry and solar sector.

In 2016, India also dragged the US to WTO against the policies of eight American states for the renewable energy sector, alleging that the domestic content requirement norms are inconsistent with global trade rules.

Besides, the country has filed a complaint against American decision to impose high fees on temporary working visas.

India's exports to the US stood at USD 42.21 billion in 2016-17, while imports aggregated at USD 22.30 billion during the same fiscal.