Govt sensitises exporters on phasing out of subsidies

Posted by Daily Shipping Times on 03-04-2018        Tweet

NEW DELHI: India has begun sensitising exporters of the threat arising out of the US challenge to the export promotion schemes at the World Trade Organization. Washington has argued that these schemes are actually export subsidies not allowed under the WTO rules.

In a meeting with industry and academicians, the Directorate General of Foreign Trade reviewed existing export promotion schemes and the likely alternative programmes as the Government prepares to address US’ concerns through consultation.

“The department has sensitised industry and academics that all schemes will be reviewed and it is looking at alternative schemes as well,” said a person who was present in the meeting.

The US has challenged practically almost the entire of India’s export programmes at the WTO, claiming they harm American workers. Pegging the quantum of subsidies at $7 billion, the US has dragged India to WTO for violating commitments under the Agreement on Subsidies and Countervailing Measures (ASCM) in five of its most used export promotion schemes—the export-oriented units scheme and sector-specific schemes including electronics hardware technology parks scheme, merchandise exports from India scheme, export promotion capital goods scheme, special economic zones and duty-free import authorisation scheme.

Government data shows that in 2016-17, Merchandise Exports from India Scheme (MEIS) had the highest number of scrips issued among the other export promotion schemes, which is 66.5%, followed by EPCG with 9.6% and Advance Authorisation Scheme with 9.5%. Scrips are incentives that can be used to pay duties.