A Dispute Settlement Panel of WTO in its report issued to members on 31 October 2019 has ruled India’s export promotion schemes (e.g. Merchandise Exports from India Scheme, Export Oriented Units Scheme, Special Economic Zone Scheme, Export Promotion Capital Goods Scheme and Duty Free Imports for Exporters Scheme etc) to be export contingent and in the nature of prohibited subsidies under the Agreement on Subsidies and Countervailing Measures and thus inconsistent with WTO norms. The Panel has given time-frame of 90-180 days for withdrawal of these schemes. However, India has appealed the Panel Report on 19 November, 2019 and due to non-functioning of Appellate Body, the appeal has been kept in suspension. Till the appeal is disposed of, India is under no obligation to implement the recommendations of Panel.

Though US has claimed that India is providing subsidies on above mentioned schemes, India has taken the stand in dispute that the subsidies are not export contingent and thus consistent with WTO  norms. India has filed appeal against the Panel ruling.

This information was given by the Minister of Commerce and Industry, Shri Piyush Goyal, in a written reply in the Lok Sabha today.

Export-contingent subsidies ruled inconsistent with trade rules; appeal suspended and implementation paused pending resolution. A WTO Panel found specified Indian export promotion schemes to be export-contingent and thus prohibited subsidies under the Agreement on Subsidies and Countervailing Measures, recommending their withdrawal; India appealed the Panel report and, due to the non functioning Appellate Body, the appeal is suspended and India has no obligation to implement the Panel recommendations until the appeal is resolved.