News / Economy

India Commerce Minister Defends Blocking WTO Deal

A laborer unloads sacks filled with rice at a wholesale grain market in the northern Indian city of Chandigarh, July 29, 2014.
A laborer unloads sacks filled with rice at a wholesale grain market in the northern Indian city of Chandigarh, July 29, 2014.
Anjana Pasricha

India has defended its decision to block a global trade deal by the World Trade Organization (WTO), but says it is still willing to join the pact if its concerns are addressed.

Addressing parliament on Wednesday, Commerce Minister Nirmala Sitharaman said New Delhi could not consider the deal due to concerns that parameters of the agreement would hamper the government's ability to distribute subsidized food to the poor. An ambitious law passed last year commits the India government to provide nearly 850 million people with wheat and rice at very cheap rates.

“Issues of development and food security are critical to a vast swath of humanity and cannot be sacrificed to mercantilist interest," she said. "Developing countries such as India must have the freedom to have food reserved to feed their poor without the threat of violating any international obligations. This is our sovereign right.”

New Delhi is wary of a clause in the WTO deal that restricts farm subsidies to 10 percent of agricultural production. India currently buys wheat and rice from farmers at above-market prices to boost output and build food stocks that are distributed at subsidized prices to poor people.

Designed to streamline customs rules and red tape, cutting costs of shipping goods across the world, the deal fell through last week when India refused to ratify it. Many diplomats had assumed the India officials would have adopted the pact after having agreed to terms of the deal at a December 2013 trade conference in Indonesia.

Criticism

Amid widespread criticism for jeopardizing a deal that by some estimates could boost world trade by $1 trillion and create more than 20 million new jobs — estimates that some Indian officials considered highly exaggerated, according to Reuters — Sitharaman indicated that New Delhi is willing to sign the pact if its demands on food subsidies are met.

“I am confident that India will be able to persuade the WTO membership to appreciate the sensitivities of India and other developing countries and see their way to taking this issue forward in a positive spirit,” she said.

The WTO says huge stockpiles of food in India could distort global trade, as they drive local prices down and dampen prices in one of the world’s largest markets.

Most economists in India say New Delhi is committed to global trade reform, but faces a genuine problem in meeting promises made to farmers and poor people.

“It is not that India wants to bypass WTO," said economist D.H. Pai Panandiker, president of the RPG Foundation, a New Delhi-based research group. "One problem that India has at the moment: the farmers are very poor and have to be given sustenance. If it is resolved, India will immediately go in for signing this agreement.”

Among staunch supporters of the deal, however, fears persist that if a solution is not found in the coming weeks, many countries will opt for regional agreements, setting back efforts for significant trade reforms.

You May Like

India PM Modi's Party Distances Itself From Religious Conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote Hindu-dominant agenda by luring Muslims and Christians to convert More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic More

This forum has been closed.
Comment Sorting
Comments
     
by: RCA from: Santa Clara, CA
August 08, 2014 2:13 PM
India is certainly open for business, but not on terms detrimental to its interests. Everyone in India realizes that trade is good for growing the economy, and expanding the middle class. The recent election was an affirmation of that sentiment.

However, there needs to be a balance between 'free' trade and food security. Progress cannot come on the backs of the poorest and most vulnerable sections of society. India has a network of fair price shops that guarantee rice, wheat, cooking oil and other essentials at fixed price. Maybe that is considered stockpiling and price-fixing by some, but it is the lifeline for the poor who depend on these for the essentials.

What India has done is not very different from the US resisting cutbacks to farm subsidies. Every country tries to protect its interests at these global trade meets, and yes, richer countries have more clout and are better able to protect their interests and dictate the terms of global trade. However, this is not the end of the world, and I'm sure future negotiations can find a solution to this.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.