GS Paper - 3 (Economy)

India has for the third time invoked the peace clause for exceeding the 10% ceiling on support it offered its rice farmers. The country informed the WTO that the value of its rice production in 2020-21 was $45.56 billion while it gave subsidies worth $6.9 billion, which comes out to 15.14% as against the permitted 10%.

What

  1. The peace clause protects India's food procurement programmes against action from WTO members in case the subsidy ceilings are breached.
  2. New Delhi had first invoked the clause in 2020 when it became the first country to do so.
  3. New Delhi told the WTO on 1 April 2022 the stocks under the programme are acquired and released to meet the domestic food security needs of India's poor and vulnerable population, and not to impede commercial trade or food security of others.
  4. The Agreement in Agriculture contains a “due restraint” or “peace clause” which regulates the application of other WTO agreements to subsidies in respect of agricultural products (Article 13).
  5. The provisions provide that Green Box domestic support measures cannot be the subject of countervailing duty action or other subsidy action under the WTO Agreement on Subsidies and Countervailing Measures, nor can they be subject to actions based on non-violation nullification or impairment of tariff concessions under the GATT.