- Balancing Policy
- India Should Defend its Autonomy in Grain Procurement
Shortly after the brutal attack on Israeli civilians by Hamas fighters last Saturday, Prime Minister Narendra Modi expressed India’s solidarity with Israel. Despite the distinct histories and varying degrees of violence in their conflicts, India, having experienced frequent terror attacks, empathizes with the pain felt in Israel.
GS2- International Relations
How does the Israel-Palestine attacks impact India? What has been India’s stance over the conflict? Illustrate. (15 marks, 250 words).
- India’s second major concern revolves around the safety of its citizens, particularly as Israel initiated retaliatory strikes on Gaza.
- Approximately 18,000 Indians work or study in Israel, along with about 85,000 Israelis of Indian origin. The Ministry of External Affairs (MEA) has arranged charter flights to bring them back to India.
- New Delhi has nuanced its initial position through the MEA’s formal statement. While condemning the Hamas attacks, the statement also reminded Israel of the “universal obligation to observe international humanitarian law” and emphasized its “global responsibility to fight the menace of terrorism.”
Background of India’s stand in the Israel-Palestine conflict:
- This statement serves as a reminder of the delicate diplomatic balancing act that India has maintained since 1992 when it established full diplomatic ties with Israel while continuing to support the Palestinian cause.
- Despite the shift towards closer bilateral relations with Israel, including trade, technological assistance, military procurement, and counter-terrorism cooperation, India has consistently supported Palestine.
Present Stance of India:
- Prime Minister Modi’s historic visits to both Israel and Palestine, as well as India’s voting against the U.S. and Israel on the issue of declaring Jerusalem as the Israeli capital in 2017, illustrate the nuanced approach.
- India’s policy lines are becoming clearer – condemning terrorism while refraining from endorsing indiscriminate reprisal bombings.
- The government maintains its consistent position on the Palestine issue.
While Hamas cannot justify its inhuman attacks on Israel by claiming historical grievances, India emphasizes that a responsible state should not behave like an insurgent group. Israel’s recent demand for over a million Gaza residents to evacuate further complicates Delhi’s challenge in balancing its policy amid the complex geopolitical landscape.
India Should Defend its Autonomy in Grain Procurement
A recent study by a daily newspaper highlighted the renewed assertion by the United States that India’s foodgrain procurement policy violates WTO rules, while the European Union seems inclined to seek a resolution.
GS3- Agriculture- Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices
India’s procurement program has been a source of dispute among countries for over a decade. Analyse the basis of this argument and suggest a way forward to effectively deal with it. (15 marks, 250 words).
The Dispute around India’s Procurement Policy:
- India’s procurement program has been a source of dispute for over a decade, with the U.S. contending that subsidies provided for grain procurement and distribution distort global markets, surpassing permissible limits defined by a WTO formula (10 percent of the value of the output of the relevant crop).
- India rightly defends its inherent right to use subsidies for food security, questioning the methodology used to calculate these subsidies and asserting that they do not distort global markets.
- Along with other developing countries, India negotiated a ‘peace clause’ at the WTO Ministerial in Bali in December 2013.
- Broadly, this deal stipulated that while WTO members worked towards an acceptable subsidy level (with improved computation methods), member countries should adhere to disclosure requirements.
- However, since 2013, there has been no real ‘peace,’ with the U.S. engaging in periodic disputes.
- The U.S. lacks a strong position as its own farm subsidies for wheat and corn are considered trade-distorting.
Current Status of the Dispute:
- India’s public distribution system has flaws, but it is the country’s sovereign right to devise solutions for feeding its people.
- Leading up to the upcoming WTO Ministerial in February, pressures on India to modify or dismantle its Public Distribution System (PDS) are likely to intensify, despite scant evidence that it distorts global grain trade, especially in rice.
- However, India should exercise caution on several fronts. As the country accounts for 40 percent of global rice trade, attention has focused on its non-basmati rice exports, which, although banned since July to address domestic inflation, remain significant.
- India’s wheat exports have increased notably since FY21. The crucial concern is that non-basmati rice and wheat, procured under the PDS, have drawn global attention.
- Accusations of India diverting PDS stocks, released at rates lower than global prices, for export advantage persist, even though these exports cannot be directly traced to government warehouses.
While India should defend its stance at the WTO by challenging a subsidy formula benchmarked to 1986-88 global prices, making its Minimum Support Price (MSP) seem disproportionately large and ‘trade-distorting,’ it should also reconsider its export promotion strategies if they attract undue scrutiny to its food policies.