Failing to find a mutually agreed solution in the stipulated 30 days to India's export promotion programmes which the US claims have harmed American workers, Washington has escalated the issue at the World Trade Organization (WTO) and asked it to refer the matter to the Dispute Settlement Body.
"The US recently formally launched a case against us on our export subsidies. They've requested the DSB to establish a panel to resolve the dispute in its next meeting," said an official.
The US had in March challenged practically almost all of India's export programmes saying that thousands of Indian companies are receiving benefits totalling over US$ 7 billion annually through the schemes. It alleged that despite the expiry of India's exemption under the WTO's special and differential provisions for developing countries in 2015, New Delhi has increased the size and scope of these programmes.
Under existing WTO rules, a country can no longer offer export subsidies if its per-capita GNI has crossed $1,000 for three years in a row. In 2017, WTO notified that India's GNI was $1,051in 2013, $1,100 in 2014 and $1,178 in 2015.
According to the Agreement on Subsidies and Countervailing Measures (ASCM), if no mutually agreed solution is reached within 30 days of the request for consultations, any party to such consultations may refer the matter to DSB for the immediate establishment of a panel, unless the DSB decides by consensus not to establish a panel.
During consultations with the US last month, India stated that the WTO informed the country only in 2017 that it has crossed this threshold and hence should get the eight-year period from 2017 to cut its exports subsidies. "Timelines would be faster in this case since the complaint was made basis the ASCM," the official pointed out.