Australia questions India’s sugar subsidy bilaterally and at WTO
Thu Oct 04 2018
Australia has raised concerns
over India’s sugar subsidy dole out and questioned how the host of financial
assistance measures announced this year are within the rules of the World Trade
Organisation (WTO).
In its queries to the WTO, it has
also asked how India intends to dispose of its planned 3 million tonnes sugar
buffer stock to ensure there is no impact on the global sugar market.
Over the last one year, the
government has announced a slew of measures—from doubling import duty,
scrapping export duty and two financial packages comprising creation of a
buffer stock and offering soft loans—to bail out its cash-starved sugar mills
and cane farmers.
Besides raising the issue at the
WTO, Australia, a major sugar exporter, has also held at least two rounds of
meetings with the commerce department, according to an official.
India also doubled the import
duty on sugar to 100% and then scrapped the export duty on it. It also made it
compulsory for millers to export 2 million tonnes of sugar even as the global
prices were low.
In June, the government announced
a Rs 8,500-crore package for the industry, including soft loans, for creating
ethanol capacity.
Another query of the Australian
government pertains to making future sugar exports financially viable, given
India’s record production and surplus and the gap between domestic and
international sugar prices. There is a glut-like situation due to record 32
million tonnes of sugar production in the 2017-18 marketing year.
“Brazil and Thailand have also
joined hands with Australia and they say global prices have crashed because of
our actions. However, we are an insignificant player and the subsidy is not huge,”
said another official aware of the development.
The official said these are
India’s domestic measures and unlikely to impact the global market.
For the minimum indicative export
quota (MIEQ), Australia has asked India to confirm the volume of sugar that was
exported under the scheme, and whether the scheme can be extended till the end
of 2018.
“Can India confirm whether
financial assistance has been withheld from sugar mills for not exporting the
prescribed quantities under the MIEQ,” it said.
Canberra has also flagged
concerns on India’s market price support for sugarcane through the Fair and
Remunerative Price, which was raised for 2018-19 sugar season, and sought
details on state advised price announced by certain states.
Source: https://economictimes.indiatimes.com/