Brazil has agreed to bilateral talks with India on the thorny issue of sugarcane subsidies and pricing policies, according to an official spokesperson.
However, despite Prime Minister Narendra Modi raising the issue with Brazilian President Jair Bolsonaro during their discussions on Saturday, diplomatic sources say that Brazil — the world’s largest sugar exporter — is not willing to withdraw its complaint against India at the World Trade Organisation (WTO).
Last July, Brazil, Australia and Guatemala initiated dispute proceedings, saying that India's policies to support sugarcane farmers do not comply with WTO rules and distort global trade. Thereafter, in August, the WTO set up a dispute settlement panel to review Indian subsidies.
Several Indian farmers groups have demanded that Mr. Modi use Mr. Bolsonaro’s visit to push for withdrawal of the complaint, saying that the livelihoods of five crore small farmers was at stake. They pointed out that by setting a fair price for sugar, the Indian government does not actually procure from or subsidise farmers, but simply protects them from exploitation by sugar mills.
An official spokesperson from the Ministry of External Affairs confirmed that the two sides had agreed to address the issue through bilateral consultations.
According to a source at the Ministry, the decision on talks represents a major change since Brazil had earlier refused to discuss the issue. The source said when Mr. Modi took up the matter with Mr. Bolsonaro, Brazil agreed to bilateral talks “as a gesture of our close friendship and given the importance India attaches to the matter”.
However, a Brazilian diplomatic source said this does not mean they will withdraw their case at the WTO.
