India has rejected the US charge of subsidising cotton beyond the limits prescribed by the World Trade Organisation (WTO) and says the support provided is intended to ensure that poor farmers do not resort to sales under distress.India says the method is consistent with WTO rules and that the country has been using a consistent reporting approach since 1995 and it uses a robust methodology as compared to the US in its calculation of the support.

Procurement by government agencies in India accounts for less than two per cent of total production. The US says India has been substantially under-reporting the value of its minimum price support (MPS) for cotton.

In its 2015-16 notification to the WTO, India reported Rs 1.2 billion in MPS for cotton whereas the US estimated India's support at over Rs 504 billion. The US says these actual support levels mean India is well in excess of its WTO spending limits on cotton support, which is fixed at ten per cent of the total value of overall production.

Other countries that raised red flags over India's support to the sugarcane sector include Guatemala, Thailand, Paraguay, Brazil and the European Union. Questions have also been raised regarding India’s decision to increase import duties on milk powder from 30 per cent to 40 per cent.