India's Commerce Secretary Rita Teotia has said there was a “real” possibility that India could lose the trade dispute filed by the US in the WTO on export subsidies. “There is a real possibility that India will lose the trade dispute with the US at WTO over subsidising exports,” she said. However, India has been responding “very strongly” to the US allegations, she added. While direct subsidy to exports cannot be given, the government can legitimately support regulatory compliances required in other countries.
The commerce secretary said, “Benefits to services exports will remain untouched, and GST refunds to exporters will continue as well.” She also said that support for input subsidy is also legitimate, however, “incentive only for exports is not eligible. There must be a cost incurred and then compensation.” The government has already set up an expert group to look at WTO-compliant support to exports, and a draft set of schemes will be announced for discussion. Teotia said the existing export subsidy schemes were continuing, as the dispute was yet to be resolved.
The US had in March, dragged India to the World Trade Organisation's (WTO) dispute settlement mechanism over export subsidies, saying the incentives were harming American companies. Washington challenged India's export subsidy programmes such as Merchandise Exports from India.
