US Says India Illegally Subsidizes Exports, Asks for WTO Consultations
The U.S. will request World Trade Organization consultations with India to resolve a trade dispute, as it contends that five Indian government programs provide $7 billion in illegal subsidies for exports. U.S. Trade Representative Robert Lighthizer made the announcement March 14, with a statement that said, in part, that “USTR will continue to 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.”
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"The Administration’s decision to challenge India’s $7 billion worth of prohibited subsidies is a plain and unmistakable signal that we will not tolerate any failure by our trading partners to live up to their commitments at the expense of U.S. manufacturers, service providers, farmers, and ranchers," House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a statement issued shortly after the announcement. "Today’s action highlights the value of ensuring that our trade agreements are fully enforceable through binding dispute settlement." He said bringing the case proves "the significance of the WTO dispute settlement process as a powerful, valuable, and appropriate tool in the Administration’s toolbox to address unfair practices that hurt our steel workers and companies. I join the Administration in calling on India to end its unfair trading immediately.”
India used to be a low-income country exempted from WTO rules on export subsidies, but it passed out of that category in 2015, Lighthizer said. Instead of ending the subsidies, India expanded them, he said. The U.S. is contesting the legality of these export subsidy programs: the merchandise exports from India scheme, the export oriented units scheme, the export promotion capital goods scheme, special economic zones and a duty-free imports for exporters program. Representatives of India's government could not immediately be reached for comment.