Australia wins case against India's export sugar subsidies at World Trade Organization

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Australia exports between 80 and 85 per cent of it's raw sugar produced overseas. (Supplied by Queensland Sugar Limited)


Australian canegrowers have won a long-running legal battle against Indian sugar subsidies, after the World Trade Organization (WTO) ruled in Australia's favour overnight.

Key points:

• A ruling by the World Trade Organisation has found that sugar subsidies in India are distorting global sugar prices
• The WTO panel ruled in favour of a combined complaint made three years ago by Australia, Brazil and Guatemala
• It found India's export subsidies were prohibited under trading rules

A WTO panel found India had export subsidies in place that were prohibited under trading rules and recommended their removal.

Chair of the Australian Canegrowers, Paul Schembri said it was an encouraging decision not only for Australian cane growers, but any sugar producers around the world that do not receive subsidies.

"We have to be pragmatic as there are still appeals processes that have to be worked through," Mr Schembri said.

"But certainly it's encouraging news."

It has been three years since Australia, along with the Brazilian and Guatemalan governments lodged a complaint with the WTO, accusing India of distorting the global sugar price through subsidies to its farmers.

Australian growers alleged the subsidies caused a glut in the international market, leading to a significant drop in global prices.

"We can't allow this distortion in the marketplace to take effect, which is why it's important we continue to prosecute," Mr Schembri said.

"In the past three or four years, the world sugar price has been at or below the cost of production, and that has exacted enormous economic damage to the Australian sugar industry."

Canegrowers had hoped a ruling would come earlier this year, but the process had been hampered by COVID-19.

In a statement, Canegrowers and the Australian Sugar Milling Council called upon the Indian government to comply with the findings of the WTO's panel.

Canegrowers in Australia, along with other members of the Global Sugar Alliance, have long argued that India's subsidies have tanked the global price. (Brad Marsellos)


It is not the first time the WTO has ruled in Australia's favour on sugar subsidies: the European Union's supports were declared illegal in 2004, which led to an immediate increase in the world sugar price.

Australia exports about 85 per cent of its domestic production, and rely on the global raw sugar prices to drive profit.

Following Brazil, Australia is the second-highest exporter of raw sugar in the world.

The win could have ramifications for Australia's other disputes, currently before the international court.

In March, the Australian government announced it would refer China to a WTO dispute panel for breaching international trading rules by imposing tariffs on barley; and in October this year, the WTO agreed to examine China's tariffs on Australian wine.

Australia wins legal battle against India over sugar subsidies

After three years, the World Trade Organization has finally reached a ruling on Australia's complaint against India's sugar subsidies.

www.abc.net.au