India may soften stand to get WTO talks going | business | Hindustan Times
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India may soften stand to get WTO talks going

business Updated: Oct 15, 2014 00:41 IST
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India is likely to show some flexibility to get stalled talks at the World Trade Organization (WTO) moving amid indications that it may not press for protection of welfare schemes that the government may launch in the future.

Instead, New Delhi will likely insist that the global trade body agree on a roadmap to define rules on “existing” subsidies that includes India’s recently launched food security programme.

At the same time, it will insist on a “discussion” at the WTO on how to protect small and marginal farmers who move from cultivating subsidised food grains to non-subsidised cash crops in the future, government officials said.

India’s nuanced change in stance, which trade negotiators will present in the WTO’s general council meeting on October 21 in Geneva, is part of New Delhi’s broad efforts to ratify a deal on easing global customs that has remained blocked.

India took the blame for blocking WTO’s trade facilitation agreement (TFA) in July because it wasn’t bundled with a roadmap for rules on food subsidies.

The TFA was designed to make trade easier, faster and cheaper by making systems transparent and reducing red tape.

New Delhi is of the view that without a permanent solution on food subsidies, India’s public stockholding programmes such a buffer stock of foodgrains will be hampered by the present ceiling on subsidy to farmers.

The officials told HT that while as part of a revised proposal India will pitch for an indefinite “peace clause” on food security until a permanent solution is found for existing subsidy schemes, it is unlikely to insist on protection of future welfare schemes that the government could launch later, a departure from its earlier hardline position.

A “peace clause” gives legal security to member countries and protects them from being challenged under other WTO agreements.

Existing rules place a cap on food subsidies at 10% of the value of production calculated at a price of the mid-1980s. India and other countries who would breach the permissible limit under this rule want the prices to be indexed at current levels.