Farm and trade associations in the US have alleged that India's subsidy to its cotton farmers is in violation of WTO norms and that India's restricted market for wines negates concessions to overseas producers.
The US cotton industry alleged that the Indian government's cotton purchase scheme is in violation of the World Trade Organisation's rules. Its wine industry, on the other hand, said India has "enacted highly protectionist trade policies" that negate the concessions suggested by the multi-lateral trade body.
Testifying before the US International Trade Commission on `India: Effects of tariffs and non-tariff measures on US agricultural experts', the National Cotton Council - the central organisation of the US cotton industry - has sought government help in this regard.
"The lack of transparency in the operation and scope of India's subsidy programme is a major impediment to trade. Despite India's membership in the WTO, it has repeatedly failed to notify its support levels to WTO," Gary Adams of the National Cotton Council said.
"The export subsidy (to cotton farmers) programme will support India's internal prices while artificially increasing its competitiveness in world market," he argued.
James Gore of the JBClawson International, on the other hand, alleged that India has "enacted highly protectionist trade policies" that negate concessions suggested by the multi-lateral trade body.
The high tariffs imposed by both the federal and the state governments make US wine quite unaffordable in India, he said, adding, the cumulative effect of various tariffs, taxes and special levies reach 400 per cent.
The special hearing was convened at the direction of the US Senate committee on finance.
At the WTO, however, the US and India found common ground on the issues of protection to farmers and nascent industries in the developing countries.
Earlier this month, when a report of the WTO estimated a global tariff cut of $150 billion through conclusion of Doha Round, India sought to know the details.
Indian officials in Geneva, the WTO headquarters, found support from unexpected quarters. "We support India's request for details on the USD 150 billion figure in the report for estimated tariff savings from DDA". Said US deputy trade representative Peter F Allgeier.