The US and Canada have registered concerns at the World Trade Organization (WTO) regarding the potential global market-distorting effects of recent policy announcements by Indian Consumer Affairs Minister Pralhad Joshion modernising the public distribution system, doubling agriculture exports and opening new global markets for Indian rice.
Referring to Joshi’s comments made last month, the US asked India to explain how policies aimed at doubling exports for a commodity (rice), for which India already accounts for 40 per cent of global exports, would not influence the commercial interests of other countries.
Canada said India must elaborate on how the use of PSH and MPS (minimum price support( MSP)) for rice, as well as the “global market distortions and negative impacts” that they cause, would be justified when aiming to increase surplus rice production and exports.
These are part of questions posed by members to each other that will be discussed at the WTO Committee on Agriculture meeting in Geneva on November 24-26.
The spotlight is on India’s rice policies as the country has invoked the 2013 ‘peace clause’ at the WTO several times seeking exemption from any challenge by other members for breaching the 10 per cent subsidy limit on rice. Countries like the US and Canada are scrutinising whether India meets the conditions attached for getting relief under the peace clause— countries must avoid distorting trade, not negatively affect the food security of other members, and provide information to demonstrate these conditions are being met.
India’s stance
India has always maintained that its MSP scheme was to support small and marginal farmers and provide food to the poor. It also kept global prices in check which ensured food security for LDCs and vulnerable countries. It also argued that its MSP stocks are not used for commercial exports.
“We understand that India is intending to incentivise production to increase its surplus rice stocks available for export, including through its PSH programme and market price support measures for rice, which have been noted to cause significant market distortions,” Canada submitted.
It asked India if it could confirm that it will maintain its PSH and MSP for rice while it seeks to increase its rice exports.
In its submission, the US pointed out that since September 2025, India’s rice export figures had been further revised upwards to 24 million tonnes, which was equivalent to 40 per cent of global rice trade.
These record export figures are fuelled by a record harvest of rice in crop year 2024-25, which well exceeds India’s domestic demand. Further, the Food Corporation of India was reported to be making a record quantity of procurement, equivalent to one-half of India’s rice crop, the US said.
“In light of record production, record exports, record procurement of rice in recent years, and continued increases in support prices, as well as record quantities of rice from public stocks being utilised for ethanol production, please clarify how increasing price supports for rice is consistent with the `Bali Interim Decision on Public Stockholding for Food Security Purposes’,” it said.
Published on November 23, 2025