Indian export subsidies violate free trade rules and should be stopped, the World Trade Organization (WTO) said in a ruling that was published on Thursday.
The case was brought before the Geneva-based organisation by the United States, which argues that the subsidy schemes for steel, medicine, chemicals, information technology and textiles amount to seven billion dollars a year.
The WTO found that India has been granting prohibited customs and tax breaks, and that it had issued notes to exporters that they can use to pay off certain debts to the government.
“This is a resounding victory for the United States,” US Trade Representative Robert Lighthizer said in a statement.
“Under the leadership of President [Donald] Trump, the United States is using every available tool, including WTO enforcement actions, to ensure American workers are able to compete on a level playing field,” he
India has the right to appeal the ruling.
However, it is unclear whether the WTO appeals panel will continue to function, as two of its remaining three members will leave in December.
Washington has been blocking the appointment of new WTO arbitrators, arguing that reforms are necessary to narrow the scope of WTO rulings.