Upholding a complaint made by the United States, a World Trade Organization (WTO) panel ruled on Thursday that India’s export subsidies were illegal and should be removed.
This was a crucial trade dispute, with WTO ordering all export promotion schemes in India to be stopped within the next four months. It also said the Special Economic Zones Scheme should be closed within the next six months.
The US Trade Representative's Office said that the panel had agreed that India provided prohibited subsidies worth more than $7 billion a year to Indian exporters of steel products, pharmaceuticals, chemicals, IT products and textiles.
Outbound trade fell by 6.57 per cent in September, to a three-month low, with the trade decline plaguing major foreign exchange earners like processed crude oil, and gems and jewellery exporters.
Why US has cornered India at the multilateral platform?