Brazil challenges India’s subsidies on sugar at WTO

In Brazil, Brazilian Sugarcane Industry Association, UNICA, has been working with the government of Brazil to demonstrate the damages India’s subsidies caused to Brazilian exports during the last sugarcane harvest. In a meeting held last week, the Brazilian Foreign Trade Chamber (CAMEX) decided to initiate proceedings at the World Trade Organization (WTO) for challenging India’s subsidies to sugar production and exports. It was understood that the country’s subsidies for the commodity violate international rules and have had a negative impact on the global market for the product, which has already declined by 40% in 2018. UNICA has been working with the government of Brazil to demonstrate that these measures are not only questionable under WTO rules, but have also been responsible for significant losses to the local industry.

The Indian government has established a support for local producers that exceeds the maximum volumes allowed for developing countries, as a percentage of total value of the production. In addition, it has provided direct subsidies to mills, with a minimum total export quota of 5 million MT and indirect subsidies to cover logistics costs on exports.