The US assessment of India’s market price support (MPS) for cotton said New Delhi was allowed to pay out up to 10 per cent of the value of production, but the actual figure had ranged from 53 per cent to 81 per cent since 2010.
“It appears that India provides MPS for cotton vastly in excess of what it has reported to the WTO,” the US filing said.
Indian commerce ministry officials declined to make an immediate comment on the US document, but India has previously dismissed US allegations that it pays higher subsidies than permitted.
Along with more than 45 countries, India has demanded that MPS should be calculated by using the recent reference period instead of 1986-88 prices, which was built into the equation at the creation of the WTO, said a government official, who declined to be named.
While India’s calculations are based on dollar terms, the US calculations are based on local currency, said the official, who has direct knowledge of the trade negotiations.
The US filing is the latest in a series of analyses of publicly available data that Washington has submitted to the WTO, each one setting out apparent breaches of WTO rules that are hiding in plain sight. Previous submissions have targeted China and Vietnam as well as India.
“The United States is providing this information to other (WTO) Members in the interest of promoting transparency surrounding India’s MPS policies,” the filing said. “This document is for the purpose of discussion by WTO Members.”
India has been the second-largest cotton producer since 2006, behind China, and the second-largest exporter since 2007, the document said.
The U.S. filing said that for the 2015-16 marketing year, India had notified market price support of $18 million, which was about Rs 120 crore, but the United States estimated that the correct figure was Rs 50,400 crore.
In 2016-17, India had not notified any MPS, but the US calculated it at around Rs 55,700 crore.
