WTO ruling on sugar exports aid won’t impact industry: ISMA

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16 December 2021, New Delhi: The World Trade Organisation (WTO) dispute settlement body’s ruling of India’s export incentives for sugar as violation of trade norms will not have any impact on the shipments of the commodity this season (October 2021-September 22), according to the apex body of private sugar mills – Indian Sugar Mills Association (ISMA).

“Indian Sugar Mills Association (ISMA) is confident that the current policies of the government on export of sugar and the subsidies therein, which were being given in the last few years are as per WTO rules and therefore there will be absolutely no impact on the Indian sugar mills or the sugarcane farmers,” the industry body said in a statement.

Ministry’s statement

A World Trade Organisation (WTO) dispute settlement panel on December 14 ruled against India’s sugar export subsidy and domestic support to sugarcane growers in a dispute filed by Australia, Brazil and Guatemala. However, the Department of Commerce issued a statement claiming there would be no impact of the panel’s findings on any of India’s existing and ongoing policy measures in the sugar sector.

ISMA said that the government has already rejected the findings of the WTO panel and had decided to appeal against the ruling with the Appellate Authority of the WTO dispute settlement body (DSB).

“First and foremost, as soon as the Indian Government submits an appeal to the Appellate Authority, as per WTO rules the current subsidies and domestic market support can be continued till any final decision is taken by the Appellate Authority,” the industry body said.

Further, the export subsidies being given in the last few years are as per the provisions of Article 9.1 (d) and (e) of Agreement of Agriculture under WTO rules. 

Therefore, Indian export subsidies on sugar are fully compliant with the rules and may not need any changes, ISMA said. WTO rules allow domestic market support for any commodity, including sugar and sugarcane, wherein the government can give market support up to 10 per cent of the value of the commodity, it said.The panel report will be adopted by WTO’s Dispute Settlement Body (DSB) within 20 to 60 days of its circulation, unless the DSB decides by consensus not to adopt it or either party notifies its decision to appeal. Since India plans to appeal, this is likely to be a long-drawn dispute. Currently global sugar prices are ruling higher on lower production and supply woes. India’s exports this season is expected to be 6-7 million tonnes against record 7.1 mt last season.

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