India’s Curbs on Broken Rice Export Face Criticism at WTO

After wheat, India’s decision to ban the export of broken rice and also impose 20% export duty on some varieties of the cereal, has come under attack from Senegal, a large importer, as well as the United States and the European Union.

Responding to the criticism during a meeting at the World Trade Organisation (WTO) last week, India defended the action, arguing that it was necessary to ban the export of broken rice, used as poultry feed, as shipments from the country had soared in recent months, creating pressure in the domestic market, sources familiar with the deliberations said.

Officials said the position of several WTO members on India’s food export is self-contradictory as they criticise New Delhi for “exporting too much” and then attack it for stopping exports.

The US and the EU acknowledged that India had the policy space to undertake the steps, but Washington sought to blame the action for creating fresh uncertainty in the global market. Senegal asked India to keep trade open, according to sources.

The ban on wheat exports too came under scrutiny with Ukraine chipping in to say that it had not stopped exports while India maintained that the move was temporary, officials said.

The US and the EU, which have traditionally attacked India’s trade policy, along with Brazil, Thailand and Australia, also sought to link the recent bans to question the government’s decision to invoke the “peace clause”, which allows members to provide more than the prescribed ceiling on procurement.

For close to a decade now, some of these countries, especially the US, EU, Australia and Canada, have sought to block a final decision on reworking the trade agreement to ensure that developing countries are not at a disadvantage on the procurement front, something that India has sought to push to ensure that the minimum support price regime is not hit.

While nine countries had sought consultations, questioning the peace clause, they are now seeking group meetings instead of meeting bilaterally, which India is keen on.

In 2013 in Bali, trade ministers had agreed not to drag a country to the WTO’s dispute settlement body in case the support for public stockholding exceeded 10% of the value of production. But it was an interim solution and so far India is the only country to invoke the provision so far, causing discomfort to developed nations, which are trying to keep the terms of trade in their favour.