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India, US resolve food row

November 13, 2014

The US and India have announced they've reached an agreement on food subsidies, marking a breakthrough on the road to implementing a key WTO trade pact. But the compromise is not a final settlement.

Indian Pokkali rice Photo: Lakshmi Narayan
Image: DW/L. Narayan

Washington and New Delhi said Thursday they'd finally resolved a row over Indian food subsidies which blocked the world's first global trade agreement earlier this year.

India had refused to back the landmark Trade Facilitation Agreement (TFA) in July, saying it would not endorse it unless its food stockpiles were exempted from possible punitive measures.

The country had argued its stockpiles were essential to help poor farmers and consumers survive in the cut-throat world of business.

Final settlement pending

India and the US agreed that New Delhi's food security programs would not be challenged under WTO rules until a permanent solution regarding the issue was agreed and adopted.

This means that the TFA can now come into effect, but it also means that the original problems caused by India's demands have only been removed temporarily and all issues concerning its food stockpiles must be revisited at a later stage.

India derails WTO deal

Critics of India's stance have frequently maintained that stockpiling and state subsidies for the poor are trade-distorting practices under WTO rules. Western nations have expressed concerns that such stocks could easily leak onto global markets, skewing trade.

hg/sgb (Reuters, AFP, dpa)