US Trade Representative welcomes WTO ruling against Indian export incentive

US Trade Representative Robert Lighthizer on Thursday welcomed the ruling of WTO's dispute settlement panel which held that India's domestic export incentive schemes are inconsistent with the global trade norms, saying this is a resounding victory for America. India on Thursday lost a case filed by the US at the World Trade Organisation (WTO) against domestic export incentives as the dispute settlement panel concluded that these schemes are inconsistent with the international trade norms.

Reacting on the ruling, Lighthizer said under the leadership of President Donald Trump, the US is using every available tool, including the WTO enforcement actions, to ensure American workers are able to compete on a level playing field. "This is a resounding victory for the United States," he said in a statement.

India will appeal against the ruling of WTO's dispute settlement panel, which held that domestic export incentive schemes are inconsistent with global trade norms, an official said in New Delhi. The ruling has stated that India should not provide subsidies based on export performance.

The dispute panel on Thursday ruled that India's export incentive schemes such as Merchandise Export from India Scheme (MEIS), Export Oriented Units (EOUs), Electronics Hardware Technology Parks (EHTP)Scheme; SEZ (special economic zone); and Export Promotion Capital Goods (EPCG) Scheme were inconsistent with global trade norms. The panel has stated that India will not get an eight-year period like other developing countries for phasing out these schemes.

With this ruling, India has to re-work these schemes and make them compatible with global trade rules, being framed by 164-member Geneva-based WTO. According to trade experts, the ruling would impact India's exports and the government will have to immediately work on alternatives.