At the World Trade Organisation (WTO), India has lost the dispute over subsidies of sugar exports with the dispute settlement panel.

Highlights

• The dispute settlement panel ruled against India, on a complaint filed by Brazil, Australia, and Guatemala.
• However, this ruling will not come into effect immediately because, India will file an appeal against this report.
• Furthermore, there is a lack of functional appellate body at the WTO. Thus, final decision on this matter will not come anytime soon.

What was the dispute?

For the five consecutive sugar seasons, in between 2014-15 to 2018-19, India had provided non-exempt product-specific domestic support to the sugarcane producers in excess of permitted 10 per cent level of total value of sugarcane production. Thus, the settlement panel report found that, India was acting inconsistently with its obligations provided under Article 7.2(b) of the Agreement on Agriculture.

India’s sugar exports

India incentivises sugar exports by extending financial support to the sector. This sector employs more than 50 million farmers in states like Uttar Pradesh and Maharashtra.