India Inc cheers India’s Stand at the WTO

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July 31 – Indian industry captains strongly support the stand taken by India's Commerce and Industry Minister Kamal Nath to stand up against the developed world, to protect the livelihood of its farmers. Over the last nine days, Nath, stood up for millions of Indian farmers at the WTO in Geneva and refused to compromise over measures to protect farmers in developing countries from greater liberalization of trade.

Even though Nath was the last man standing against the western powers, the pressure his government faces in India is more acute. His ruling coalition is up for elections next year and farm subsidies are a major electoral crutch for Indian political parties. Nearly 60% of the population lives in the countryside and the vast majority of Indians derive their income directly or indirectly from farming, even though agriculture makes up less than a fifth of India's almost trillion-dollar economy.


"If the government were to agree to something which will kill our agricultural sector, then their political futures will be finished," MS Swaminathan, the director of India's National Commision on Farmers, who led the country's green revolution in the 1970s told Businessweek.

“I kept saying ‘No, I don’t agree’ at every point,” Nath said in a telephone interview from Geneva yesterday. “I come from a country where 300 million people live on 1 dollar a day and 700 million people live on 2 dollars a day. So it is natural for me, and in fact incumbent upon me, to see that our agricultural interests are not compromised. You don’t require rocket science to decide between livelihood security and commercial interests.”

The Geneva talks broke down as India and the United States refused to budge on their respective stands on Special Safeguard Mechanism. While the Group of 33 developing countries, of which India is a member, wanted an import surge of 110 per cent over a three-year base period to trigger SSM's, the US wanted it to be 150 per cent. WTO director-general Pascal Lamy had proposed a 140 per cent trigger.

“This would have meant that MNCs exporting farm goods to India would only send that much quantity of products, which would be less than 140 per cent. Thus, even if prices plummeted, India would not have been able to invoke the SSMs. Meanwhile, the marginal farmer would have suffered from the price slump,” Bhaskar Goswami, spokesperson, Forum for Biotechnology and Food Security said.