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Question- 1. India requesting WTO to exempt it from trade distortion laws can be counterproductive to India’s future trade exports, especially in agriculture. Comment.


Answer India has asked WTO for exemption when it comes to exporting foodgrains procured for the purpose of food security at subsidized rates.

The global trade situation is favourable for India to get new customers as supply of wheat has been severely affected.

Issues in demanding exemption

  • Strengthen allegations
    Developed countries are already accusing India of exporting grains procured from farmers through subsidies. By seeking exemption from WTO, India will strengthen their allegations.
  • Impact global trade
    Using subsidized grains for exporting will distort global trade as India will be able to offer cheaper rate than other countries. This will impact equal business opportunity.
  • Domestic shortage
    India’s domestic procurement is already low due to variety of reasons. In case India wants to export the grains, there will be issues of domestic food insecurity.

Measures to overcome opposition

  • UN WFP
    India is using the argument of humanitarian support for demanding exemption for exports. If India is serious about supporting countries, it can strengthen its donations to UN World Food Programme.
  • Lift ban on exports
    India can lift the ban imposed on export of wheat by traders. This will ensure that trade will not be distorted.

Thus, food security aspect cannot be used as a reason for getting exemption from WTO. This practice can start a bad precedent for world trade.

Tags: GS 3 ( Economy)
By- Raghunandan

Updated on 04 Aug 2022 |   Added on .02 Aug 2022  |  by admin