An Opportunity That India Let Go

India may have missed a rare opportunity to reform an antiquated program of agriculture subsidies with the support of the World Trade Organization. The newly installed Modi administration also signaled to the global business community that the country may not be ready for serious reform. “By standing alone against all, including its partners in BRICS, the G-20 and G-33, and threatening to scuttle the Trade Facilitation Agreement (TFA), India has not only earned the world’s opprobrium, but also blighted its own efforts to modernise trade,” writes Nayan Chanda, editor of YaleGlobal Online, in his column for Businessworld. He also points out that by relying on the Aadhaar identification card, linked to benefits and bank accounts, India could have been “fully WTO compliant, falling into the so-called ‘green box’ of allowable subsidies.” As distributed, the subsidies benefit mostly wealthy farmers, reduce productivity, reinforce corruption, and contribute to waste of water and electricity and, as Chanda concludes, could ruin the agriculture sector that India is so eager to protect. – YaleGlobal