US Launches WTO Challenge Against Indian Export Subsidies

Fri 16 Mar 2018
Posted by: Sam Pileggi
Trade News

US and Indian flag with crack

The USA has launched a challenge at the World Trade Organisation against India's export subsidy programmes, arguing that they hurt US companies and give Indian companies an unfair advantage by enabling them to sell goods more cheaply.

The challenge covers India's programmes including the Merchandise Exports from India Scheme; the Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme; Special Economic Zones; Export Promotion Capital Goods Scheme; and a duty free imports for exporters programme.

United States Trade Representative (USTR) Robert Lighthizer stated:

“These export subsidy programmes harm American workers by creating an uneven playing field on which they must compete.

“USTR will ... hold our trading partners accountable by vigorously enforcing U.S. rights under our trade agreements and by promoting fair and reciprocal trade through all available tools, including the WTO."

The office of the USTR said export subsidies provide an unfair competitive advantage to the companies that receive them and are prohibited under WTO rules.

A limited exception to the rule is provided for developing countries until they reach a specific economic benchmark, the USTR office said. It said India was initially within the group of developing countries but surpassed the economic benchmark in 2015.

The dispute is noteworthy given the Trump administration’s frequent criticism of the Geneva-based WTO.