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Export Subsidies in India Subject of USTR Inquiry

Friday, April 06, 2018
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative is accepting comments through April 16 on the issues raised in a World Trade Organization dispute the U.S. has filed against export subsidy measures maintained by India.

The programs being challenged are the merchandise exports from India scheme; the export-oriented units scheme and sector-specific schemes, including the electronics hardware technology parks scheme; special economic zones; the export promotion capital goods scheme; and a duty-free imports for exporters program. USTR has said these programs provide more than $7 billion annually in total benefits, including exemptions from certain duties, taxes, and fees and reduced import duty liability, to thousands of Indian exporters, including producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel. 

WTO rules expressly prohibit export subsidies but allow specified developing countries to continue to provide export subsidies until they reach a defined economic benchmark. USTR notes that India surpassed this benchmark in 2015 but has not yet withdrawn its export subsidies and in fact has increased their size and scope.

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