Trade War: US Launches WTO Challenge Of Indian Export Subsidies

While we await the announcement of the trade war nuke - namely tariffs against China - moments ago the US Trade Representative announced the launch of a WTO challenge to Indian export subsidy programs, in the latest global trade skirmish which is likely to grow into something far bigger.


In a statement on the USTR website, Robert Lighthizer, announced that the United States has requested dispute settlement consultations with the Government of India at the World Trade Organization (WTO) challenging Indian export subsidy programs. 

These programs are:

  • the Merchandise Exports from India Scheme;
  • Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme;
  • Special Economic Zones;
  • Export Promotion Capital Goods Scheme;
  • a duty free imports for exporters program. 

These apparent export subsidies provide financial benefits to Indian exporters that allow them to sell their goods more cheaply to the detriment of American workers and manufacturers.    

“These export subsidy programs harm American workers by creating an uneven playing field on which they must compete,” said Ambassador Lighthizer.  “USTR will continue to hold our trading partners accountable by vigorously enforcing U.S. rights under our trade agreements and by promoting fair and reciprocal trade through all available tools, including the WTO.”

Trump and Modi in happier times.

The USTR claims that through these programs, India provides exemptions from certain duties, taxes, and fees; reduces import duty liability; and benefits numerous Indian exporters, including producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel.  According to Indian Government documents, thousands of Indian companies are receiving benefits totaling over $7 billion annually from these programs.

And some background from the USTR:

Export subsidies provide an unfair competitive advantage to recipients, and WTO rules expressly prohibit them.  A limited exception to this rule is for specified developing countries that may continue to provide export subsidies temporarily until they reach a defined economic benchmark.  India was initially within this group, but it surpassed the benchmark in 2015. India’s exemption has expired, but India has not withdrawn its export subsidies.  

In fact, India has increased the size and scope of these programs.  For example, India introduced the Merchandise Exports from India Scheme in 2015, which has rapidly expanded to include more than 8,000 eligible products, nearly double the number of products covered at its inception.

Exports from Special Economic Zones increased over 6,000 percent from 2000 to 2017, and in 2016, exports from Special Economic Zones accounted for over $82 billion in exports, or 30 percent of India’s export volume.  Exports from the Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme, increased by over 160 percent from 2000 to 2016.       

Consultations are the first step in the WTO dispute settlement process.  If the United States and India are not able to reach a mutually agreed solution through consultations, the United States may request the establishment of a WTO dispute settlement panel to review the matter.

Of course, since trade war by definition invited retaliation, we now wait for just how Indian will respond to this initial trade war salvo between the US and India.



So great a cloud Wed, 03/14/2018 - 13:26 Permalink

As others have said: Currency wars, lead to trade wars which lead to shooting wars.  When you're watching it happen, it keeps you guessing as to the timing of everything but it sure seems like we are getting there.  Peace everyone.

popeye Four Star Wed, 03/14/2018 - 14:15 Permalink

So, looking forward to tariffs on all EU products, then on exports from all countries with a workforce earning <$10.00/hour - paying people low wages to make stuff for American consumers has got to be a form of export subsidy to the manufacturer, right?

And what I'm REALLY looking forward to is how Trump will place tariffs on Lookheed Martin, Raytheon, General Dynamics, Boeing et al - I mean, they receive the worlds biggest subsidies don't they?

In reply to by Four Star

BandGap So great a cloud Wed, 03/14/2018 - 13:48 Permalink

India will align with the US in any global conflict. Pakistan and China are forming an alliance and there's that.

People are picking sides, tightening strategies.  The wild card will be Russia.

There are rumors that India has a lot of war materiale in caves/tunnels in the mountains on the Chinese/Nepal border. They aren't just throwing rocks, they have traded artillery fire over the past few years. 

In reply to by So great a cloud

Davidduke2000 Wed, 03/14/2018 - 13:27 Permalink

Indians are very passive people  they would not take any measures to harm their trade with the us.

They had a border fight with China, their soldiers threw rocks at the chinese.

Consuelo Wed, 03/14/2018 - 13:33 Permalink

If you like pissing & shitting in the river you drink from, you can keep the piss & shit from the river you drink from.   And crapping on the sidewalk too...

ToSoft4Truth Wed, 03/14/2018 - 13:35 Permalink

Trump should Tariff Pakistani clothing.  Muslims there are building nukes with American dollars. 


International Apparel merchandiser from Nike, Sears, Kohl's, and Wal-Mart, to Gap, Macy's and Old Navy, there is hardly a globally renowned clothing brand that does not outsource its apparel manufacturing operations to Pakistani garment manufacturers.


- Apr 28, 2016

FoggyWorld ToSoft4Truth Wed, 03/14/2018 - 15:36 Permalink

He ought to toss out that EO that Obama placed on labels.  Things used to have specific countries of origin labelled on all products but today that isn't happening and the best you can get is:  Imported.  No mention of a specific country required.

Trump can do that right now and by himself.  Put back the specifics and let people make their own choices.

I found a nice bottle of Vodka the other day and found that it was Made in Pennsylvania.  Plain vodka really is a chemical process so I bought American and felt better for it.  

In reply to by ToSoft4Truth

Jay Wed, 03/14/2018 - 13:38 Permalink

Wait. The US is complaining that the lack of import duties in India is an unfair advantage to Indian exports? I thought the whole point of Trump's trade war was to force import duties down in other countries.

AurorusBorealus Wed, 03/14/2018 - 13:48 Permalink

Cue the Jewish conspiracy comments.  it's the Jews who subsidize Indian industry to destroy the U.S. middle class.  The Jews are doing this to advance a globalist agenday that seeks to weaken the U.S. (which somehow fits with their global conspiracy to use U.S. power to protect Israel).

I suspect when little Tyley Turban started this web-site to expose Wall-Street corruption, he never foresaw that it would become the the Global Assembly of Neo-nazis.  I propose that the name of the site be changed from Zerohedge to ZeroSkinHead.

Thank you for coming.  Vote Trump.  Make Torture Great Again.  Down with the Jews. Down with the Blacks.  White Power!

Such a shame that this once fine site has become such a joke.


Peak Finance AurorusBorealus Wed, 03/14/2018 - 13:58 Permalink

LOL the Anti-Jew stuff hit a little too close to home? 

How long did you think this was going to go on before people noticed at the other end of a bad business deal is ALWAYS someone named -berg, -stein, -Cohen and so on? 

How long before someone noticed the maths at the Top 10 and the Ivy League and realized you were rigging admissions in your own favor? 

109 in 2000 years and it's always someone else's fault, right? 

Hell I can go on and on here. 

Just curious, do you really care or were you paid to post this? 

In reply to by AurorusBorealus

Neochrome Wed, 03/14/2018 - 13:52 Permalink

India should just have their companies fulfill army orders for $10,000 screwdrivers like US does. 

Yeah, no subsidy there in any way.…

Despite the tens of billions being wasted on a project like the F-35, the examples that tend to draw the most attention from the media and the most outrage among taxpayers involve overspending on routine items. This may be because the average person doesn’t have a sense of what a fighter plane should cost, but can more easily grasp that spending $640 for a toilet seat or $7,600 for a coffee pot is outrageous.

Thordoom Wed, 03/14/2018 - 14:04 Permalink

I am all for protecting your land and people. Totally but in case of US empire.....i do not know if you realize that you can't expect India  to be your harbor of shit like any vesle the Empire of shit occupies and use them to do your dirty work against China. India is one of the rare cases of still free independent countries with independent policies.How  is US supposed to live of the countries around the world when they trying to screw them even more then they already are.

Md4 Wed, 03/14/2018 - 14:31 Permalink

"These apparent export subsidies provide financial benefits to Indian exporters that allow them to sell their goods more cheaply to the detriment of American workers and manufacturers."


How about unpatriotic western corporate imports of Indian (and other) labor to the detriment of American workers?

Don't even need the WTO to stop that...


i support whatever it takes to balance trade with the world, even if that means a full ban on any imports with particular offenders.


BUT...many of those offenders are here.

We have mucho head cracking to do right here TOO.

Lemme hear 'bout some o' dat...


east of eden Wed, 03/14/2018 - 15:06 Permalink

poor, stupid fucking Modi. He bought a ticket on the Trump train, but they forgot to tell him is was in standby.

How do you feel now, Modi.

Don't let let door hit you on your way out. And by the way, whatever happened to all that gold?

snblitz Wed, 03/14/2018 - 15:19 Permalink

I am not a belligerent if I ask you to stop beating me.

tariffs, subsidies, etc, has been used to the disadvantage of the United States for 40 years.

These came about primarily due to US politicians selling out the people they represent for personal gain via foreign interest deals by their family and friends.  Just look up your politicians and see what businesses there family and friends are associated with.  (follow the money)

I am not sure why Trump feels the need to go to the WTO.  Unilateral is fine.

Nations are sovereign.  Who put the WTO in charge?  Are you saying the WTO is sovereign?  Than what is the nation for? How can your vote count if the WTO is the sovereign?