India’s Rice Export Policy

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Context

• India has requested more time at the World Trade Organization (WTO) to formulate a response to clarifications sought by Australia, Canada, Brazil, Switzerland, and the UK.
• These countries are questioning whether India had stopped its rice exporters from participating in United Nations World Food Programme (WFP) tenders, which could be a violation of multilateral trade rules.

READ ABOUT WTO’S AGRICULTURAL SUBSIDIES: https://www.iasgyan.in/daily-current-affairs/wto-agrcultural-subsidies

READ ABOUT PEACE CLAUSE: https://www.iasgyan.in/daily-current-affairs/peace-clause-at-the-world-trade-organization-wto#:~:text=However%2C%20there%20is%20no%20immediate,a%20permanent%20solution%20is%20found.

Concerns Raised by WTO Members

Impact on Global Prices

• The UK noted at the recent WTO agriculture committee meeting that India’s restrictions on rice exports have led to a significant decline in total exports of the staple in 2023-24.
• They suggested that these policies might be contributing to rising global rice prices, as reported by a Geneva-based trade official.

Questions on WFP Tenders

• India did not provide immediate answers to the clarifications sought by Australia, Canada, Brazil, Switzerland, and the UK.
• The questions revolved around whether India had stopped its rice exporters from participating in WFP tenders earlier this year for the supply of broken rice to Cameroon, Togo, and Algeria.
• India stated that it had taken note of the questions and would respond soon.

Allegations of Violation

• The countries pointed out that if India had indeed halted participation in WFP exports, it would violate its commitment to exempt such supplies from export restrictions.
• At the WTO’s 12th Ministerial Conference in Geneva in 2022, members had approved a decision to exempt the WFP’s humanitarian food purchases from export restrictions.
• Initially, India had reservations about this decision due to concerns about retaining the flexibility to impose export restrictions for domestic food security, but it ultimately consented.

Reports and Requests

Pre-meeting Submissions

• Before the meeting, the complaining countries submitted questions to the WTO, referencing reports from late February 2024.
• These reports claimed that India's Directorate General of Foreign Trade (DGFT) had received requests to allow rice exporters to engage in the WFP’s rice tender process but denied them.
• The countries asked India to clarify whether these reports were accurate.

US Concerns

• At the meeting, the US also expressed deep concern over reports that India had prohibited exports through the WFP. The US urged India to end these measures and notify them in compliance with its WTO obligations.

India's Position

Export Ban

• India banned the export of non-basmati white rice in July 2023.
• However, it has allowed shipments to countries on a government-to-government (G2G) basis to meet food security needs.

Clarification on Export Allowances

• New Delhi clarified that some exports of non-basmati rice were permitted to address the food security needs of certain countries based on specific requests.

READ ABOUT WTO’S AGRICULTURAL SUBSIDIES: https://www.iasgyan.in/daily-current-affairs/wto-agrcultural-subsidies

READ ABOUT PEACE CLAUSE: https://www.iasgyan.in/daily-current-affairs/peace-clause-at-the-world-trade-organization-wto#:~:text=However%2C%20there%20is%20no%20immediate,a%20permanent%20solution%20is%20found

PRACTICE QUESTION Q. Explain the Peace Clause in international trade agreements, emphasizing its protection of food security measures in developing countries. Evaluate its effectiveness and propose improvements for better alignment with evolving global trade dynamics.

SOURCE: THE HINDU