India reportedly filed an appeal on November 19 against the report by a World Trade Organisation (WTO) panel, which ruled that many of the former’s export promotion incentives were not in sync with multilateral trade rules and needed to be withdrawn. The case was initiated by the United States. The panel report was circulated to WTO members on October 31 2019.
The WTO panel had backed several claims filed by the United States against export promotion measures adopted by India, including the Merchandise Export from India Scheme (MEIS) and the Export Promotion Capital Goods (EPCG) scheme.
As India’s per capita gross national income (GNI) has increased beyond $1000 per annum, which is the threshold beyond which export subsidies are not allowed, many of its export promotion schemes flouted rules, alleged the United States.
As per the panel recommendations, India needed to withdraw the ‘prohibited subsidies’ under schemes within 120 days from adoption of the report. The panel rejected India’s contention that it was exempted from the prohibition on export subsidies under the special and differential treatment provisions of the WTO Agreement on Subsidies and Countervailing Measures (SCM).
The appellate body of the WTO, however, is likely to become dysfunctional from December 11 if the United States continues to block the appointment of new judges, and a judgment on the case may get delayed. It usually takes around three months for a judgment to be delivered.
