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US challenges India at World Trade Organization for alleged export subsidies

The U.S. filed a complaint with the World Trade Organization alleging that India provides more than $7 billion in benefits annually to Indian companies through export subsidy programs, which it said undercuts American companies and workers.

In a March 14 news release, the Office of the U.S. Trade Representative, or USTR, accused the Indian government of providing export subsidies to domestic companies for a variety of products, including textiles, apparel, steel products, chemicals, pharmaceuticals and information technology products. WTO rules prohibit export subsidies, which the U.S. trade agency said provides an unfair advantage to foreign competitors.

U.S. Trade Representative Robert Lighthizer said the U.S. requested dispute settlement consultations with India at the WTO because the South Asian nation is providing exemptions from certain duties, taxes and fees and is reducing import duty liability for Indian producers.

"These export subsidy programs harm American workers by creating an uneven playing field on which they must compete," Lighthizer said. "USTR will continue to hold our trading partners accountable by vigorously enforcing U.S. rights under our trade agreements and by promoting fair and reciprocal trade through all available tools, including the WTO."

Consultations begin the WTO dispute settlement process. Should a settlement not be reached between the U.S. and India, the U.S. can then call for a WTO dispute settlement panel to handle the case.

Although WTO rules prohibit government subsidy programs, the USTR's office said an exception is given to developing countries until they reach a certain economic threshold. India was given an exception until it rose above the threshold in 2015 and no longer qualified, according to the trade agency.

The USTR's office alleged that India has not only continued its subsidy programs since then but also expanded their size and scope, including introducing a program in 2015 that includes more than 8,000 eligible products.

"These apparent export subsidies provide financial benefits to Indian exporters that allow them to sell their goods more cheaply to the detriment of American workers and manufacturers," the USTR said.