The World Trade Organisation will establish a panel to rule on a US complaint on certain programs in India that are prohibited export subsidies. India was not given an opportunity to object to the first request for a dispute panel by the US, as is the usual practice, because the dispute involves prohibited subsidies.

The panel was established under special provisions of the WTO’s Agreement on Subsidies and Countervailing Measures allowing panels to be established on first request for disputes involving alleged prohibited export subsidies. The programs targeted by the US include popular incentive schemes such as the Merchandise Exports from India Scheme, Export-Oriented Units Scheme and sector-specific schemes, including Electronics Hardware Technology Parks Scheme, Special Economic Zones, Export Promotion Capital Goods Scheme and Duty-Free Imports for Exporters Program.

The US, in its representation, argued that the programs provided financial benefits to Indian exporters, which allowed them to sell their goods more cheaply to the detriment of American workers and manufacturers. It alleged that while the exemption given to India from the ban on export subsidies had expired (as the country had surpassed the 1000 dollar threshold for per capital gross national product), it was yet to withdraw its schemes. India however is not convinced that the time it is entitled to for a phase-out of the schemes has lapsed and wants more discussion on the issue.