U.S. EU Proposes Ban on Indian Cotton Export Ban

The United States, the European Union, and Canada questioned India’s cotton export ban at the WTO, but India said that India’s actions are fully in line with multilateral trade rules that allow temporary restrictions on imports. These countries also said that they are concerned about the method used by India to classify marginal farmers, and statistics on domestic agricultural subsidies made at the recent WTO WTO Committee on Agriculture.

India, on fear of a shortage in the domestic market, announced a ban on cotton exports on March 5. However, on March 12, it lifted the ban on cotton export contracts that had been registered prior to the ban. A government official said that India clarified that the export ban was only for a short period of time. Before the ban was announced, about 2 million bales of cotton were already registered with the government. This part of the cotton will then be allowed to be exported.

Indian officials also pointed out that India banned cotton exports and temporarily prohibited or restricted exports in order to prevent or reduce the serious shortage of cotton in the country. This is in line with WTO rules. U.S. officials pointed out that India believes that the restrictions are in conformity with the WTO rules, but the ban on export measures is a blow to market predictability and transparency, because they feel very unpleasant. The United States and Europe are a few developed countries that have been striving for a global resolution. They seek to resolve the prohibition of food export restrictions and limit food export taxes.

Developing countries, including India, China and Brazil, oppose this resolution. In using the method of calculating domestic subsidies and classifying marginal farmers, and the data provided by India being wrong, a Ministry of Commerce official said that the Ministry of Commerce will review the notice and will consult with other ministers and relevant departments.

The United States found that some figures in India’s notification were inconsistent with the website’s September quotes from India. For example, the definition of marginal land holding. Canada and the United States also asked India to clarify the basis of the “marginal” and to identify growers as the basis for low-income, resource-poor, marginal, small/half-medium/medium-sized landholders, and so on. In order to better understand who is the goal of India's development plan and fertilizer subsidies.