The World Trade Organization set up dispute panels to decide whether India's sugar subsidies are illegal, in a move that could lead to sanctions against the South Asian country, Reuters and the Financial Times reported.
Australia, Brazil and Guatemala asked the WTO this week to set up a dispute settlement body to investigate whether India's export subsidies for sugar and sugarcane producers violate global trade rules, the reports said. The three countries said in separate documents submitted last month that India's provision of domestic support is inconsistent with WTO obligations because it is in excess of the country's de minimis entitlement of 10% of the value of production of sugarcane.
This was the countries' second appeal after India rejected their first request in July.
India is the world's second-biggest sugar producer next to Brazil, according to data from the U.S. Department of Agriculture. The country has said the measures are meant to protect its projected 60 million sugarcane farmers, according to the FT report.