- WTO has asked India to withdraw some export subsidy programmes
- The US had accused India of giving prohibited subsidies to Indian steel producers, pharmaceuticals,information technology sector etc
A World Trade Organisation (WTO) panel has ruled against at least five of India’s export promotion schemes because it was giving prohibited subsidies. The Indian government has been given 90-180 days to withdraw the concessions under these schemes.
Some of the schemes include Merchandise Exports from India scheme (MEIS), Special Economic Zones scheme, Export Oriented Units, Electronics Hardware Technology Park, Bio-Technology Park scheme, Export Promotion Capital Goods (EPCG) and the Duty-Free Imports for Exporters scheme (DFIS).
Gross national product exceeded $1,000 per annum
The panel further added that India is not entitled to provide subsidies depending on export performance and its per capita gross national product exceeded $1,000 per annum. Under Article 3.1 of the WTO’s Subsidies and Countervailing Measures (SCM) agreement, all developing countries with gross per capita of $1,000 per annum for three consecutive years are required to stop all export incentives
The panel added, “We conclude that, to the extent the measures at issue are inconsistent with the SCM Agreement, India has nullified or impaired benefits accruing to the US under this agreement.”
The US had earlier accused India of giving prohibited subsidies to Indian steel producers, pharmaceuticals, chemicals, information technology, textiles and apparel. Though panel upheld most of the claims made by the US, it rejected some points related to exemptions from customs duties and an exemption from excise duties.
