The World Trade Organisation (WTO) has ruled against at least five of India’s export promotion schemes, saying it was granting prohibited subsidies. The US had approached the multilateral body in protest against India’s grant of subsidies. However, the US claims regarding a subset of exemptions from customs duties and an exemption from excise duties were rejected by the WTO. The US had dragged India to the WTO in March 2018, questioning its export promotion schemes as the trade battle between the two countries intensified.

India has been given 90 to 180 days to withdraw concessions under the schemes, which include the Merchandise Exports from India Scheme, the Special Economic Zones scheme, the Export Oriented Units, Electronics Hardware Technology Park and Bio-Technology Park schemes, the Export Promotion Capital Goods and the Duty-Free Imports for Exporters schemes.

WTO says India grants prohibited export subsidies in the form of exemptions from customs duties, deductions from taxable income, and the issuance of notes or scrips that firms can use to pay off certain debts. India is said to provide prohibited subsidies to Indian exporters worth more than $7 billion annually to producers of steel products, pharmaceuticals, chemicals, information technology products, textiles, and apparel, to the detriment of American workers and manufacturers.