US
Challenges India's Export Subsidy Programme at WTO
The
US on 14 March challenged Indian export subsidies schemes at the World Trade Organisation, saying these programmes
harm American workers by creating an "uneven" playing field,
officials said.
The US
Trade Representative (USTR) argued that at least half a dozen Indian programmes provide financial benefits to Indian exporters,
which allow them to sell their goods more cheaply to the detriment of American
workers and manufacturers.
These
programs are: the Merchandise Exports from India Scheme; Export Oriented Units
Scheme and sector specific schemes, including Electronics Hardware Technology
Parks Scheme, Special Economic Zones, Export Promotion Capital Goods Scheme and
Duty Free Imports for Exporters Programme.
"These
export subsidy programmes harm American workers by
creating an uneven playing field on which they must compete," said Lighthizer.
"USTR
will continue to hold our trading partners accountable by vigorously enforcing
US rights under our trade agreements and by promoting fair and reciprocal trade
through all available tools, including the WTO," Lighthizer
said.
The
announcement from Lighthizer came while Indian
Foreign Secretary Vijay Gokhale was on his maiden
visit to the US. He was scheduled to hold meetings with the USTR.
In a
statement, the USTR alleged that through these programmes,
India is given exemption from certain duties, taxes, and fees which benefits
numerous Indian exporters, including producers of steel products, pharmaceuticals,
chemicals, information technology products, textiles, and apparel.
According
to the Indian government documents, thousands of Indian companies are receiving
benefits totaling to over $7 billion annually from these programs.
The USTR
said export subsidies provide an unfair competitive advantage to recipients.
A limited
exception to this rule is for specified developing countries that may continue
to provide export subsidies temporarily until they reach a defined economic
benchmark. India was initially within this group, but it surpassed the
benchmark in 2015. India's exemption has expired, but India has not withdrawn
its export subsidies, USTR alleged.
"In
fact, India has increased the size and scope of these programs," USTR
charged.
For
example, India introduced the Merchandise Exports from India Scheme in 2015,
which has rapidly expanded to include more than 8,000 eligible products, nearly
double the number of products covered at its inception, it alleged.
Exports
from Special Economic Zones increased over 6,000 per cent from 2000 to 2017,
and in 2016, exports from Special Economic Zones accounted for over $82 billion
in exports, or 30 per cent of India's export volume.
Exports
from the Export Oriented Units Scheme and sector specific schemes, including
Electronics Hardware Technology Parks Scheme, increased by over 160 per cent
from 2000 to 2016, it asserted.
Noting
that consultations are the first step in the WTO dispute settlement process,
The USTR said if the US and India are not able to reach a mutually agreed
solution through consultations, it may request the establishment of a WTO
dispute settlement panel to review the matter.