New Delhi, February 14, 2024 – As farmers resume protests in the national capital, demanding a law to guarantee a minimum support price (MSP) for all crops, experts caution that India’s susceptibility to trade disputes at the World Trade Organization (WTO) is on the rise. The ongoing protests highlight the farmers’ insistence on the MSP law, with some advocating for India’s withdrawal from the WTO.
The ‘Peace Clause’ and the Looming Trade Disputes
India’s Use of ‘Peace Clause’ Raises Stakes
Trade experts and former negotiators warn that India’s repeated use of the ‘peace clause’ at the WTO, allowing breaches of the 10% subsidy ceiling on rice procurement, puts the country at risk of facing heightened pushback over food subsidies. The imminent 13th ministerial conference in Abu Dhabi later this month is identified as a critical juncture for India to secure a permanent solution on public stockholding for food grains.
Importance of a Permanent Solution at WTO
Flexibility for Developing Countries and Higher Farm Support
A permanent solution at the WTO is deemed crucial, providing India and a coalition of developing countries with the flexibility to offer increased farm support. This is especially relevant in the context of farmers’ protests, where the demand for MSP laws persists. Some farmer groups argue for India’s exit from the WTO, emphasizing the need for a more independent approach.
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