The United States had challenged many of India’s export promotion schemes such as MEIS, EOU/EHTP/BTP, SEZ, EPCGS and DFIS as being inconsistent with India’s obligations under the Agreement on Subsidies and Countervailing Measures (ASCM).
The dispute was referred to a WTO panel which concluded that these subsidies are prohibited and inconsistent with the ASCM. The panel report was circulated on 31st October 2019.
In its report, the panel has recommended that India withdraw these programmes within a specified period from adoption of the report. These findings are likely to have far reaching implications as these programmes provide vital support to India’s export sector and come at a time when the domestic and global economy is under significant pressure. Focus now is on the Government to frame appropriate export support schemes that are compliant with the WTO framework.
Lakshmikumaran & Sridharan is organizing a conference to discuss the panel’s findings, options available and the way forward.