In another remark for India at the global level, the World Trade Organization (WTO) said the country has violated global trade laws.
Considering US’ concerns on India’s trade incentives, the world trade body said the latter has gone against the global rules by giving USD 7 billion annual incentives to its companies.
India neither responded nor thought of appealing to the trade body. But claims that it’s entitled to do so under policy-related exemptions given to the developing nations.
Rejecting the claim, WTO asked India to withdraw its export subsidy schemes within six months to avoid facing punitive tariffs from Washington.
Welcoming the decision, the US Trade Representative Robert Lighthizer said this allows US companies to enjoy a level-playing field.
The Trump administration had filed a case against India in 2018 stating the latter was providing prohibited and extended support in pharma, textile, steel and technology sectors.
WTO’s decision is coming at a time when India and US are streamlining their bilateral relations, which was also even evident in Howdy Modi program. The two sides had then thought about some landmark negotiations to ease the bilateral trade.
Meanwhile, Washington has stopped appointment of judges to its appellate body. As a result, the body is most likely to run out of judges to operate by December 2020, ultimately hitting the operations of global trade dispute settlement.
On the other hand, EU, Canada and other nations are working on building of alternative global trade dispute settlement regimes, considering the lock-down situation at the WTO appellate body.