WTO Rules Against India On International Trade Norms Granting A Temporary Win For The United States

On October 31, 2019, the WTO Dispute Settlement Panel ruled that certain export schemes run by India violate Articles 3.1(a) and 3.2 of the Subsidies and Countervailing Measures Agreement (SCM Agreement). The U.S. government brought the challenge in May 2018, alleging that export subsidies provided by India under five sets of measures, including: the Export Oriented Units, Electronics Hardware Technology Park, and Bio-Technology Park (EOU/EHTP/BTP) Schemes; the Export Promotion Capital Goods (EPCG) Scheme; the Special Economic Zones (SEZ) Scheme; a collection of duty stipulations described in these proceedings as the Duty-Free Imports for Exporters Scheme (DFIS); and the Merchandise Exports from India Scheme (MEIS); were in violation of the prohibition on export subsidies set forth under the SCM Agreement. It claimed that the subsidies were hurting American companies and that the subsidies run by the Indian Government were giving undue advantage to Indian companies. "According to the Indian Government, thousands of Indian companies are receiving subsidies totaling over $7 billion annually from these programs, and India has increased the size and scope of these programmes," the office of U.S. Trade Representative said in a statement. The United States also said that India gives prohibited subsidies to producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel. The WTO's website states that India argued before the Panel that the special and differential provisions of Article 27 of the SCM Agreement excluded it from the application of the prohibition on export subsidies as a developing country. However, the Panel found that India had graduated from this threshold since its per capita gross national product...