The World Trade Organization (WTO) Director General Ngozi Okonjo-Iweala is looking into resolving WTO rules that are making it difficult for India to export food grains to meet shortages in other countries, caused by the Russia-Ukraine war, according to Finance Minister Nirmala Sitharaman. The difficulties, the Minister said, included WTO rules around the export of food by a country that had also procured food on a Minimum Support Price basis.
“Countries like India, which can probably supply [food grains] are facing difficulties with WTO,” Ms. Sitharaman told reporters on Friday, April 22, 2022, the final full day of her visit to Washington DC for the World Bank/ International Monetary Fund (IMF) Spring Meetings.
At the IMF Plenary meeting on Thursday, Ms. Okonjo-Iweala had said that the WTO was “looking at it [ food export issues] positively” , as per the Finance Minister, who expressed optimism that the issue could be resolved.
“So these are kind of opportunities that we’re carving out of a challenging situation,” she said , pointing to the war having not just brought challenges to India, like having to deal with the global hike in commodity prices, but also opportunities. The opportunities she listed included the export of food grain – such as wheat – and the possibility of manufactured goods being exported to destinations for which supplies had become unreliable.
India has reached out to more than twenty countries regarding exporting wheat, and is targeting a record 15 million tonnes of wheat for export this year, as per a Bloomberg report. India is expected to have a surplus this year, producing more than 111 million tonnes of the crop.
The country’s export of food grains to meet global market shortages was also discussed during External Affairs Minister S. Jaishankar’s meetings in Washington last week. Mr Jaishankar was in the city for the India-US ‘2+2’ foreign and defence ministers’ dialogue as well bilateral meetings with U.S. officials.
“India is trying to one, of course, find markets for its product. Two, [it is trying to] be of meaningful assistance, so that, where there is hunger, there are grains to go, and nothing should stop them from going there,” Ms Sitharaman said on Friday.
India has been criticised in the U.S., as well as by several other countries, for failing to take a stronger stand against Russia and for not directly condemning its aggression against Ukraine. The U.S. has also been pressuring India to not increase its purchases of Russian oil at this time. Moscow has offered and sold oil at a discounted price to New Delhi in recent weeks. However, a very low proportion (1%-4% based on estimates from Indian and U.S. officials) of India’s energy imports come from Russia. The U.S. has offered to help India replace Russian oil with oil from elsewhere.
‘U.S. understands India’s position on Russia’
Responding to a question on the interplay of India’s significant defence relationship with Russia and its growing and significant trade relationship with the U.S., in its decision to not call out Russia by name for the invasion of Ukraine, Ms. Sitharaman pointed to India’s geography. She said that there was an understanding in Washington of India’s geopolitical realities and “this recognition [ by the U.S.] that there is a friend there [in India] , but the friend’s geographical location has got to be understood and a friend cannot be weakened for any reason”.
“It’s not as if India has a choice to relocate itself,” Ms. Sitharaman said, describing various challenges India faced along its northern and western borders – a reference to China and Pakistan
“India certainly wants to be a friend. But if US also wants a friend…the friend should be not weakened,” she said.
“ So we are taking decisions, we are taking calls, we are taking a calibrated position because we need to be strong where we are given the geographical locational realities.”
Citing developments like the India-US ‘2+2’ meetings, the Biden-Modi summit virtual meeting last week, and India’s consideration of the soon-to-be-announced Indo Pacific Economic Framework (IPEF) - the Biden administration’s economic cooperation framework for the Indo Pacific, Ms. Sitharaman said she was seeing “ more and more windows of opportunities opening”, rather than the U.S. keeping India at a distance because of India’s “calibrated” stance with respect to Russia.
