India
will dispute US’ findings that claim New Delhi paid trade-distorting
subsidies in the last seven years to its cotton farmers in excess of 10%
permitted for developing countries. The US has alleged that India
provides market price support or MPS for cotton “vastly in excess of
what it has reported to the World Trade Organization (WTO)” and it ranged from 53-81% of the value of production from 2010-11to 2016-17.
“We will dispute these findings strongly,” said an official in the know of the details.
This is the second counter-notification by the US attacking India’s
subsidy numbers. In May, the Trump administration had challenged India
on the basis of support given to wheat and rice.
However, the latest salvo is being seen in the light of the US targeting the
cotton subsidies
given by African countries to their poor farmers “The US’ cotton
subsidies have devastated African countries and hence, it is trying to
shift the focus on us,” said another official.
In its latest counter to India’s subsidies, the US said: “India''s
notifications for the years at issue appear to dramatically under-report
the value of India''s MPS for cotton”.
“The dollar-rupee difference is there and the US has assumed that the entire production of cotton is eligible for subsidies, which is incorrect,” the second official added.
“The US wants India to report in rupee terms while India submits dollar-denominated numbers to the WTO. Depreciation of the rupee has helped us but the WTO does not mandate any particular currency,” said a Delhi-based expert on WTO issues.
The WTO Agreement on Agriculture defines subsidies on the total value of agriculture production while the US has challenged India on the basis of support given to individual products. Similarly, the agreement doesn’t specify the currency in which countries have to report their subsidy dole out.
For example, India''s notification for marketing year (MY) 2015-16
showed a value of support, converted from US dollars, of Rs 117.64 crore
for cotton. By comparison, the US estimates that India’s MPS was Rs
50,415 crore for cotton in that year.India
will dispute US’ findings that claim New Delhi paid trade-distorting
subsidies in the last seven years to its cotton farmers in excess of 10%
permitted for developing countries. The US has alleged that India
provides market price support or MPS for cotton “vastly in excess of
what it has reported to the World Trade Organization (WTO)” and it
ranged from 53-81% of the value of production from 2010-11to 2016-17.
“We will dispute these findings strongly,” said an official in the know ..
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“We will dispute these findings strongly,” said an official in the know ..
Source: The Economic Times, India Thursday, 15 November 2018