Business

India Studies WTO Rules To Continue Export Schemes

India Studying Loopholes In WTO Rules To Continue With Textile Export Subsidies. The Directorate General of Foreign Trade (DGFT) has asked the Trade Policy Division of the Commerce Ministry to examine World Trade Organisation (WTO) rules minutely, to see if India can make a case for an eight-year phase-out period for its textile export subsidy schemes.

Schemes such as the Merchandise Exports From India Scheme, Export Promotion Capital Goods Scheme and Interest Equalisation Scheme for the textiles sector under the Foreign Trade Policy (FTP) 2015-20 are likely to be impacted when it comes up for a mid-term review later this month.

In a couple of months, the Gross National Income (GNI) notification for 2015 will be released and technically, India will not qualify any more for export subsidies. This is because as per figures released by the WTO Committee on Subsidies & Countervailing Measures, India’s Gross National Income (GNI) crossed the US $1,000 mark for 2013 and 2014. This would mean that export subsidies for India’s textile sector would have to be phased out in 2018.

However, the DGFT is making a strong case for asking the WTO to stick to the eight-year phase-out period, since it does not want to make drastic changes in the existing export subsidy schemes, since doing so would rock the boat considerably, especially given the present state of India’s exports and economy, a ministry official said.

Besides, exporters were also promised certain schemes for five years though it was known that India’s status was about to change at the WTO. The ministry has to try and see that the schemes continue at least till the end of the FTP period to keep the trust of exporters, the official said. He said that it is not clear whether India will be entitled to an eight-year phase-out period which is allowed by the WTO under certain conditions. If such a possibility exits, the Commerce Ministry will push for it, he said.