The United States and Canada have raised fresh concerns at the World Trade Organization (WTO) over India’s recent policy announcements on rice production, exports, and public stockholding, warning that they could distort global markets.
The questions—submitted ahead of the WTO Committee on Agriculture meeting scheduled in Geneva from November 24–26—focus on statements made last month by Consumer Affairs Minister Pralhad Joshi about modernising the public distribution system (PDS), doubling agricultural exports, and opening new global markets for Indian rice.
With India already accounting for nearly 40% of global rice exports, Washington asked New Delhi to explain how plans to “double exports” would not impact the commercial interests of other exporting countries.
Canada echoed the concern, saying India must clarify how its public stockholding (PSH) and minimum price support (MSP) systems—flagged repeatedly as market-distorting—align with efforts to increase surplus production for export. Ottawa noted that both measures have previously contributed to “global market distortions and negative impacts.”
Spotlight on Peace Clause Usage
India’s rice policies are under sharper scrutiny because the country has invoked the WTO’s 2013 Bali ‘peace clause’ multiple times to shield itself from legal challenges for breaching the 10% subsidy cap for rice. The clause requires beneficiaries to ensure their programmes do not distort global markets or adversely affect other members’ food security.
Members, including the US and Canada want India to demonstrate compliance with these conditions, including transparent data submissions.
Record Production, Rising Exports Raise Flags
In its submission, the US pointed out that India’s rice exports were revised upward to 24 million tonnes since September 2025—equivalent to about 40% of global trade—driven by a record 2024–25 harvest far exceeding domestic needs.
It also highlighted that the Food Corporation of India (FCI) is reportedly procuring nearly half of the country’s rice crop, while rising MSP levels and diversion of public stocks for ethanol production have raised further concerns.
“In light of record production, record exports, record procurement… and continued increases in support prices… please clarify how increasing price supports for rice is consistent with the ‘Bali Interim Decision on Public Stockholding for Food Security Purposes’,” the US asked.
India’s Position
India has consistently defended its MSP and PSH schemes as essential for supporting small and marginal farmers and ensuring food security for the poor. It has also argued that its policies help stabilise global prices, benefiting least developed and vulnerable countries.
India maintains that rice procured for food security programmes is not used for commercial export, and that its market interventions are not aimed at distorting trade.
As the WTO’s agriculture committee meets this week, India’s responses to these questions will be closely watched, with its rice support policies once again taking centre stage in multilateral trade discussions.
