India might lose trade dispute with U.S. at WTO

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By Shahid Qureshi: –

India might lose the trade dispute with the U.S. pending at the World Trade Organisation (WTO), said the country’s Commerce Secretary Rita Teaotia on Thursday.

English daily “The Hindu” quoted the official as saying that the reason for India’s possible defeat was that the income levels in India had crossed the threshold for exports to be subsidised.

“There was a real possibility that India could lose the trade dispute that the U.S. had filed in the WTO on export subsidies. This was because income levels in India had crossed the threshold for exports to be subsidised,” said Teotia.

However, she added, India has been responding “very strongly” to the U.S. allegations.

She further stated that while direct subsidy to exports could not be given, the Indian government could legitimately support regulatory compliances required in other countries. “Benefits to services exports will remain untouched, and GST (goods and services tax) refunds to exporters will continue as well,” she added.

The government has already set up an expert group to look at WTO-compliant support to exports, and a draft set of schemes would be announced for discussion, she added.

The existing export subsidy schemes were continuing as the dispute was yet to be resolved, the paper quoted her as saying.

The U.S. had in March 2018 dragged India to the WTO’s dispute settlement mechanism over export subsidies, saying that these incentives were harming American companies.

Washington challenged India’s export subsidy programs such as merchandise exports from India Scheme in the WTO, asserting that these initiatives harm its companies by creating an uneven playing field.

The U.S. said that thousands of Indian companies were receiving benefits totaling over seven billion U.S. dollars in the name of subsidy annually under various export promotion programmes.

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