New Delhi: Ending their deadlock at the World Trade Organisation, India and the United States on Thursday reached an agreement under which the subsidy given by the Indian government to farmers through minimum support prices will not be challenged even if they breach set limits.
It is a major victory for the Narendra Modi government in the international economic diplomacy arena, in which India has shown considerable toughness to protect the interests of its farmers by vetoing the Trade Facilitation Agreement (TFA).
It managed to secure Washington’s support for its food security scheme without having to make any major concessions.
The agreement between India and the US paves the way for the implementation of TFA, that seeks to ease customs rules and could add $1 trillion to the world economy.
In July, India had rejected an agreement on TFA as it wanted the issue of minimum support prices for farmers to be resolved alongside that.
Both countries have come to an understanding on the implementation of a December 2013 WTO decision on specific food security programmes maintained by some developing countries, a US government statement said.
"The bilateral agreement makes it clear that a mechanism under which WTO members will not challenge such food security programmes under WTO dispute settlement procedures will remain in place until a permanent solution on this issue has been agreed and adopted," the statement added, noting that the agreement also sets out elements for an intensified programme of work and negotiations to arrive at such a permanent solution.
The agreement will now be presented for consideration by the full WTO membership.