WTO Scrutinizes Indian Curbs on UN Rice Tenders

Context

India’s recent restrictions on rice exports have come under scrutiny from the World Trade Organization (WTO). The WTO is concerned that India’s export curbs may violate global trade rules and impact global food security. 

India’s Export Restrictions

During the past few months, India has placed several measures that aimed at limiting rice exports. These include a 20% duty on all varieties of rice excluding basmati rice and parboiled rice and an outright ban on export of broken rice aegis. Also, there are the Indian export control measures such as export ban on wheat and wheat flour. These measures act as a way of addressing food security for the country and stabilising the high rates of inflation on food items.

WTO Concerns

This rise has prompted the WTO to express concern over export restrictions that Modi has placed in an attempt to violate core trade laws. Coming to the WT0 members the US, EU and Senegal have voiced concern of stock market fluctuations and its implications for food security across the globe. Duties raised by India, especially restrictions on exports to the UN World Food Program (WFP) focuses on reducing hunger and food insecurity around the world are of particular concern to the WTO.

India’s Clarification

India has made a distinction that the current restriction it has placed on export is based on broken rice that is to be used in poultry feed as the country experienced increase in exports and this placed pressure on its domestic market. India has also clarified that its export policy is only to make adjustments temporarily with export restrictions constantly under review. However, WTO members keep doubting whether it is compatible with WTO regulations, or not, India wants to take such measures.

WTO Rules and Commitments

In June 2022, WTO members decided to bring food purchases that the WFP makes for purpose of humanitarian aid out from export restraints. The idea in the beginning was disapproved by India but later on it agreed to it. Bhagwati mentions that WTO members want to know India’s position better, as their restrictions seem to conflict with the spirit of the exempting supplies that WFP needs.

Impact on Global Food Security

Current export measures taken by India have left food security in the globe under a very serious concession. It is sad that the WFP depends on the importation of Indian rice to feed millions of people, especially in those hungry nations. It may make the WFP function inefficiently in tackling world’s hunger and malnutrition problems.

Conclusion

Therefore, the WTO and its members raised the concern on the export restrictions placed on rice by India as they criticised the effects on other global markets, as well as the WTO rules. The Indian Government needs to address the food security raised internally while managing its commitment towards the trading systems globally. It has the responsibility of making sure that its members practise the WTO rules of trade and thereby introduce stability within the world trading systems so as to ensure food security.

Source: The Hindu

UPSC Prelims Practice Question

Q. Which of the following statements about the World Trade Organization (WTO) is/are correct?

1. The WTO was established on January 1, 1995, replacing the General Agreement on Tariffs and Trade (GATT).
2. The main functions of the WTO include administering WTO trade agreements, providing a forum for trade negotiations, and handling trade disputes.
3. The WTO has a judicial system that can impose sanctions on countries that do not comply with its rulings.

Select the correct answer using the code given below:

a) 1 and 2 only                b) 2 and 3 only

c) 1 and 3 only                d) 1, 2, and 3

Ans – “a”

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