The Indian government believes elimination of export subsidies on cotton by developed nations of WTO would help domestic growers and also prevent dumping of subsidised natural fiber in India. The commerce ministry said in a statement that WTO's Nairobi Ministerial decision on elimination of export subsidies on cotton will be good for Indian exports as it will create a level playing field for domestic farmers, who were not entitled to it but other developed countries were providing the same.
India's push has helped in elimination of cotton export subsidies by developed countries. This will help Indian cotton growers in competing with other growers as well as prevent dumping of subsidised cotton in India, the statement said. The government is committed to the welfare of cotton farmers and has been taking steps to protect them. These include procurement through Cotton Corporation of India (CCI) at minimum support prices, the statement added.
The statement further said that cotton is an important crop and very high level of subsidies in developed countries have been a cause of worry for developing countries as they adversely affect cotton growers in the poorest nations. The WTO's Agreement on Agriculture (AoA) permits export subsidies on agriculture subject to the limits set-out in members' schedules of commitments. Export subsidies can still be used by the World Trade Organization (WTO) members, but only where they used them during the base period (1986-1988).