US Files WTO Challenge Over India Export Subsidy Schemes

The US filed a request for consultations at the WTO last week, claiming that India has exempted many of its exporters from paying certain taxes, fees, and duties in a way that violates global trade rules. Washington says that those measures provide producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel with benefits to the tune of around US$7 billion per year, enabling India exporters to “sell their goods more cheaply to the detriment of American workers and manufacturers.” This dispute comes at a time when India is in the middle of implementing its ambitious five-year export promotion plan . New Delhi officials have said that they aim to “raise the share of manufacturing from the current level of about 15 percent to 25 per cent of GDP by 2025.” Prohibited export subsidies In its consultations request, the US listed 27 examples of Indian laws and regulations that it claimed are WTO-prohibited export subsidies. Under the global trade club’s subsidy rules, its members are prohibited from using state aid to support exports that are “contingent… upon export performance,” and outlines examples of what would fall under this category. The WTO also allows developing and least developed countries...