With India unwilling to relent on its demand that food security be considered in the World Trade Organisation's trade facilitation agreement (TFA), it is facing heat from other nations, particularly from the United States.
The trade facilitation agreement reached in Bali last year, and hence sometimes referred to as the Bali pact, is considered to be one of the biggest reforms of the WTO since its establishment in 1995 if it comes into effect. The agreement seeks to ease customs rules at national borders to facilitate trade.
While the Modi government had made its stand clear on Wednesday that India cannot afford to let go of food security, it reiterated on Friday that it would most likely block the reform of custom rules if its demands are not met. With the deadline for the TFA protocol set at 31 July, there is little expectation that India would change its stand.
The United States has warned India that its demands could kill global trade reform efforts, Reuters reported.
With the Bali reforms, nations expect to add $1 trillion to the global economy and create 21 million jobs.
However, the main issue of contention for developing nations such as India is that the agreement would limit every country's expenditure on subsidies to farmers for building stockpiles of food for the poor to only 10 percent of the total agricultural output. However, India has been demanding that the body take into account the government's $12 billion expenditure on annual food subsidies. The WTO is also not in favor of stockpiling of food as it affects trade, but India stockpiles large amounts of food for its poor.
"My delegation is of the view that the adoption of the TF (trade facilitation) Protocol be postponed till a permanent solution on public stockholding for food security is found," Indian Ambassador Anjali Prasad said at the WTO meeting, according to Reuters.
India reportedly won support from nations such as Cuba, Venezuela and Bolivia, but a "very, very large majority" of WTO members opposed India's stance, an official said.
India's decision was met with strong words from US Ambassador to the WTO Michael Punke who said, "Today we are extremely discouraged that a small handful of members in this organisation are ready to walk away from their commitments at Bali, to kill the Bali agreement, to kill the power of that good faith and goodwill we all shared, to flip the lights in this building back to dark".