India, Brazil in talks to resolve sugar dispute

New Delhi India is in negotiations with Brazil to resolve a sugar dispute at the World Trade Organisation (WTO) and the commerce ministry is coordinating with concerned departments for the same, government sources said.

India is also following a similar process for other complainants of the sugar dispute at the Geneva-based WTO, they said. In 2019, Brazil, Australia and Guatemala dragged India into the WTO's dispute settlement mechanism alleging that New Delhi's sugar subsidies to farmers are inconsistent with global trade rules.

The Department of Commerce is coordinating with all the concerned line ministries to arrive at possible alternatives, one of the sources, who is aware of the development, said. The exercise assumes significance as a WTO dispute settlement panel on December 14, 2021, ruled that India's support measures for the sugar sector are inconsistent with the global trade norms. In January 2022, India appealed against the panel's ruling at the WTO's appellate body, which is the final authority on such trade disputes. Brazil is the largest producer and exporter of sugar in the world. India is the world's second-largest sugar producer after Brazil.

Brazil, Australia and Guatemala, which are members of the WTO, had complained that India's support measures to sugarcane producers exceed the de minimis level of 10 per cent of the total value of sugarcane production, which according to them was inconsistent with the WTO's Agreement on Agriculture.

They had also flagged India's alleged export subsidies, subsidies under the production assistance and buffer stock schemes, and the marketing and transportation scheme.