India Ready To Shift Stance On Farm Subsidies

Original Publication Date: 
23 February, 2004

Published: February 24 2004 22:03 | Last Updated: February 24 2004 22:03

India is ready to discuss reducing its agricultural subsidies and importbarriers if leading international trade partners show they are serious aboutcutting theirs, the economic adviser to the Indian prime minister said onTuesday.

The comments by S. Narayan appear to contradict categoric recent statementsby Indian ministers ruling out reductions in farm subsidies. The issue ispolitically highly sensitive in India, almost half of whose 1bn people liveoff the land.

Jaswant Singh, the finance minister, said three months ago that he could not'recommend that India ever give up supporting subsidies relating to theagriculture sector. Nobody on earth [can].'

However, Mr Narayan said that 'a lot of opportunities and options are on thetable. We are happy to look at a phased reduction. We would be willing toreduce [farm] subsidies at the same rate as other countries.'

He said the main issue to be resolved was how quickly reductions would bephased in. They would need to take account of unspecified 'sensitive'agricultural products, to ensure that farmers' livelihoods were notendangered.

He indicated that cutting farm subsidies could be one means to achieve thefederal government's goal of eliminating its large budget deficit by 2008.

He said India, which has so far strongly resisted pressure in the Doha worldtrade talks to reduce its farm import barriers, was willing to discuss doingso if other countries were ready to reciprocate. However, he said: 'We arenot getting any clear message from the US and the Europeans on the kind ofpath they would like to follow.'

Mr Narayan, who does not have direct authority over policy, adopted acautious attitude towards the results of India's recent efforts to concludebilateral trade agreements with several other countries.

'I think we have to see as we go, as we negotiate,' he said. India planstalks with countries in south and south-east Asia and is consideringnegotiations with Brazil, China and South Africa. The Indian government cutimport duties on steel and coal used by the industry on Tuesday, in a moveto halt rising domestic prices ahead of crucial national elections wheninflation is a key concern, Reuters reports from New Delhi.

The cuts include a reduction in the basic import duty on steel products from20 to 15 per cent, on pig iron from 15 to 10 per cent and on metallurgicalcoke from 10 to 5 per cent.

Govt Willing To Upgrade Services OfferThe Financial Express (India)OUR ECONOMIC BUREAU

NEW DELHI, FEB 24: The government is examining the option of upgrading itspreliminary offers in services at the ongoing World Trade Organisation (WTO)negotiations and has started consultations with stakeholders.

According to commerce special secretary SN Menon, the country is planning toimprove its offers in keeping with it strength and aggressive interests inthe area. As part of the process, the commerce ministry has started holdingdiscussions with stakeholders, including professional bodies, industryassociations and the ministries concerned.

The government had submitted its preliminary offers in services late lastyear as part of the request-offer process adopted by WTO for negotiations onservices issue.

Speaking at a session on 'the WTO and the Cancun meetings: Implications forIndia' at the third Asia-Pacific Executive Forum, organised by theConfederation of Indian Industry and the East-West Centre of US here onTuesday, Mr Menon said the attempt by the United States and the EuropeanUnion to reach a framework agreement on agriculture and non-agriculturemarket access could not be in isolation to services negotiations. 'This willhave to be a part of the package if consensus is to be reached,' he said.

Stressing on the government's flexible approach at the ongoing WTO talks,the special secretary said the country was willing to engage in a process ofgive and take so that mutually acceptable outcomes might be reached.'Movement forward demands understanding and accommodation. We are willing toengage in this,' he said.

Mr Menon said the multilateral process was important and the country firmlybelieved that rule-based trading system provided a fair, transparent,predictable, secure and durable environment for trade relations betweennations. New Delhi also wanted to ensure that 2004 is not a lost year, headded.

Despite New Delhi's interests in pushing the talks forward, the specialsecretary cautioned that the country wanted to ensure that theliberalisation process was fair and equitable.

'We, in India, cannot accept attempts by the developed world to underminecritical elements of the Doha work programme which were designed to give thedeveloping countries a share in the growth of world trade commensurate withthe needs of their economic development,' he said.