India lags behind its BRICS peers in notifying subsidies before WTO

Written by Arun S | New Delhi | Updated: Aug 21 2014, 10:10am hrs
WTOIndia lags far behind its BRICS peers and even other comparable economies such as Indonesia, Korea and Malaysia.
India lags far behind its BRICS peers and even other comparable economies such as Indonesia, Korea and Malaysia when it comes to notifying annually before the WTO all its domestic support to agriculture producers in terms of subsidies in a year with their monetary values.

A recent WTO document on the compliance of its members with notification obligations as of May 23 this year showed that India has submitted domestic support notifications only for the years from 1995 to 2003.

Commerce ministry sources here said India will soon submit notifications for the years from 2003 till 2011, adding that some technical difficulties in calculating the domestic support were holding up the compliance.

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Submission of notification assumes significance as the developed countries have demanded that India must first be up-to-date regarding compliance with its notification obligations before pushing for fast-tracking negotiations on finding a permanent solution to the issue of public stockholding for food security purposes. The ministry officials, however, said it is not proper to make compliance with notification obligation a pre-condition for taking forward the talks on food security.

Also, according to the WTO's Bali Ministerial Declaration, for a member to avail the peace clause , it must not only fulfil its domestic support notification requirements but also must have notified the Committee on Agriculture that it is exceeding or is at risk of exceeding its product-specific and total Aggregate Measurement of Support limits as a result of the public stockholding programmes for food security purposes.

Peace clause (which is available till a permanent solution is found on the issue of public stockholding for food security) gives immunity for a member from being taken to the WTO's dispute settlement body for exceeding the prescribed norms of domestic support for agricultural producers in pursuance of public stockholding for food security purposes. Brazil has complied with the obligation till 2011, Russia (which became a WTO member only in August 2012) has submitted its notification for 2012, while China and South Africa is in compliance for the years till 2008 and 2010 respectively. The developed world was also much ahead with the European Union submitting domestic support notifications till 2010, Japan (2012) and US (2011).

As per WTO norms, domestic support notification must include exempt and non-exempt support. Exempt support includes those with nil or minimal trade distortive effect such as government provided agricultural research or training and food security stock. The non-exempt category is the trade-distorting support including government buying-in at a guaranteed price (market price support).