India-US export subsidies row at WTO: Not yet a trade war; Here’s what you need to know

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Updated: March 15, 2018 6:00:21 PM

A day after the United States challenged Indian export subsidies at the World Trade Organisation, the Narendra Modi government said that it does not consider the stand-off to be the beginning of a trade war.Here's what you need to know

India responds to US legal challenge on exports subsidiesIndia-US exports subsidies row at WTO: Not yet a trade war; Here’s what you need to know (Image: Reuters)

A day after the United States challenged Indian export subsidies at the World Trade Organisation, the Narendra Modi government said that it does not consider the stand-off to be the beginning of a trade war. Commerce Secretary Rita Teaotia on Thursday said that India will engage with the US and convey its position for the exports subsidies programme.

The Trump administration, which is advocating protectionism, on Wednesday challenged Indian export subsidies at the WTO and contended that it is hurting US companies. US Trade Representative Robert Lighthizer said that the subsidies are letting Indian exporters sell their goods in the US market at a cheaper price, Reuters reported.

The US alleged that “India had failed to remove the subsidies as required by WTO rules after the country reached certain economic benchmarks”. India provides exemptions from some exports duties, taxes and fees that benefit the exporters in the steel, chemicals, pharmaceuticals, textiles and information technology sector, Robert Lighthizer said.

In January, to make Indian exports more competitive in the global market, the government had raised duty drawback rates on 102 items. The duty drawback rates were raised on marine and seafood products, automobile tyres and bicycle tyres/tubes, leather and articles of leather, yarn and fabric of wool, glass handicrafts and bicycles.

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