WTOs elimination of cotton export subsidies to benefit Indian cotton exports

The Ministry of Commerce and Industry of India on Wednesday providing clarification with regard to export subsidies for cotton said that the World Trade Organisation’s 2015 Nairobi Ministerial has taken decision to eliminate export subsidies on cotton will benefit Indian shipments of the crop as India is not a user of export subsidies for cotton.

It will create a level playing field for farmers, who were not entitled for it but other developed countries were providing the same as scheduled, as per the rules.

Since India did not have export subsidies during 1986 to 1988, which is the base period per the Uruguay Round Agreement on Agriculture (AOA), India is not entitled to export subsidies. However, subsidies to reduce the cost of marketing, transportation costs, handling and processing costs are permitted without circumventing the export subsidy reduction commitments.

Developed nations have agreed to eliminate export subsidies based on the Nairobi Ministerial Decision on Cotton and Export Competition, which was adopted on 19 December, 2015. This agreement will enable developing countries to eliminate export subsidies by 1 January, 2017.

India has pushed for the adaptation of Nairobi decision, which will prevent the dumping of subsidised cotton in India, according to the Ministry of Commerce and Industry, India.

The Nairobi Ministerial decision on cotton and export competition resulted in a commitment by developed countries to immediately eliminate their export subsidies, while developing countries were required to do so by January 1, 2017.