US says India Paid Bigger Cotton Subsidies than WTO Allows

India has paid out far more in cotton subsidies than the World Trade Organization allows, with payments “vastly in excess” of what it had officially declared, the United States said in a filing to the trade watchdog on Monday. The U.S. assessment of India’s market price support (MPS) for cotton said New Delhi was allowed to pay out up to 10 percent of the value of production, but the actual figure had ranged from 53 percent to 81 percent since 2010. “It appears that India provides MPS for cotton vastly in excess of what it has reported to the WTO,” the U.S. filing said. Indian Commerce Ministry officials declined to make an immediate comment on the U.S. document, but India has previously dismissed U.S. allegations that it pays higher subsidies than permitted.

Along with more than 45 countries, India has demanded that MPS should be calculated by using the recent reference period instead of 1986/88 prices, which was built into the equation at the creation of the WTO, said a government official, who declined to be named.

While India’s calculations are based on dollar terms, the U.S. calculations are based on local currency, said the official, who has direct knowledge of the trade negotiations. The U.S. filing is the latest in a series of analyses of publicly available data that Washington has submitted to the WTO, each one setting out apparent breaches of WTO rules that are hiding in plain sight. Previous submissions have targeted China and Vietnam as well as India.