The world's two leading sugar exporters, Australia and Thailand, have questioned India's inland transport subsidy for sugar exports at the World Trade Organisation.

Published on December 7, 2007

India has not only come out in defence of its measures but is also gearing up to question the support given by these two countries to their sugar sector, a newspaper reported.

India has been compensating inland movement in coastal areas to the extent of 1,350 rupees (Bt1,050) a tonne and 1,450 rupees a tonne for movement of sugar for exports by mills located in the interior. Official records have termed this as "assistance" and not as a subsidy.

Reacting to the move by Australia and Thailand, Indian Commerce Minister Kamal Nath has maintained the measure as WTO-compatible.

According to sources, India is also gearing up to question the subsidies and support given by Thailand and Australia to their sugar exports.