India protests WTO’s sugar dispute resolution

The dispute over Indian sugar led by Brazil, Australia and Guatemala at the WTO will linger into 2022. Parallelly, European producers started resisting the entry of the product into their markets regardless of its source of origin.

Earlier this month, the WTO condemned New Delhi for granting illegal sugar subsidies in a lawsuit filed by Brazil, Australia, and Guatemala. A panel (investigation committee) concluded that the Indian government increased massively the practice of granting subsidies to the sugar industry and reintroduced a minimum price that caused supply to exceed domestic demand.

The Dispute Settlement Body of the WTO must formally enforce the decision of the judges in the first weeks of 2022. Thereafter, India will have 120 days to withdraw unlawful subsidies involving sugar production, marketing and transportation.

However,  the Indian Ministry of Commerce and Industry protested the decision calling it “completely unacceptable.” The institution will formally file an appeal. Notwithstanding, as the Appellate Body of the WTO is not operational, the litigation will continue for a long time without a final solution.

In any case, India sees that WTO’s findings have little impact on its current aid policies. The government has already stopped granting export subsidies for up to 6 million tons for the fiscal year 2021/22 (from October to September 2022).

Indian exports reached 7.2 million tonnes in 2020/21, of which 1.2 million were sold without subsidies.

According to U.S. analysts, even without subsidies, India will be able to export more than 6 million tons by September 2022. Thanks to its exportable surplus, lower production rates in Brazil, and steady global prices, India has signed sales contracts for 3.55 million tons in the current season.

Source: Valor Econômico

To read the full original article visit:  https://valor.globo.com/agronegocios/noticia/2021/12/28/india-resiste-a-decisao-da-omc-na-disputa-do-acucar.ghtml

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