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India gets her way on cotton subsidy

After a long struggle, India has succeeded in getting the subsidies on cotton in developed countries eliminated. This will provide a level-playing field for Indian cotton producers. Developed countries have committed themselves to the elimination of subsidies. Apart from this, there will be no more dumping of subsidised cotton into India.

This has been a long-pending demand of Indian farmers and their persistent pressure has finally paid off. Cotton is a very important crop and the very high level of subsidies in developed countries has been a cause of worry for developing countries. Subsidies provided in these countries adversely affect cotton growers in the poorest of the countries. Export subsidies can still be used by WTO members, but only where they used them during the base period (1986-1988).

As India did not have any export subsidies during the base period, it is not entitled to any export subsidies except subsidies aimed at reducing the cost of marketing including internal and external transport as well as handling and processing costs provided that these are not applied in a manner that would circumvent export subsidy reduction commitments. India is not a major user of export subsidies and gave no export subsidy for cotton between 2006-07 and 2009-10.