INDIA – MEASURES CONCERNING SUGAR AND SUGARCANE NOTIFICATION OF AN APPEAL BY INDIA UNDER ARTICLE 16.4 AND ARTICLE 17.1 OF THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Document: WORKING PROCEDURES FOR APPELLATE REVIEW
Date: 11 January 2022
Document codes: WT/DS579/10; WT/DS580/10; WT/DS581/11
Complainant: Brazil
Respondent: India
Third parties: Australia, Canada, China, Colombia, Costa Rica, El Salvador, EU, Guatemala, Honduras, Indonesia, Japan, Panama, Russia, Thailand, U.S.
Dispute stage: Panel
Agreements cited: Art. 3.2, 3.3, 6.3, 7.2(b), 8, 9.1, 10.1  Agriculture

INDIA – MEASURES CONCERNING SUGAR AND SUGARCANE
NOTIFICATION OF AN APPEAL BY INDIA UNDER ARTICLE 16.4 AND
ARTICLE 17.1 OF THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE
SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 20(1) OF THE
WORKING PROCEDURES FOR APPELLATE REVIEW
The following communication, dated 24 December 2021 , from the delegation of India, is being
circulated to Members.

Review (WT/AB/WP/6) ( "Working Procedures "), India hereby notifies to the Dispute
Settlement Body its decision to appeal to the Appellate Body certain issues of law covered in
the Panel Reports1 and certain legal interpretations developed by the Panel in the three disputes
India – Measures Concerning Sugar and Sugarcane (, ,
; , , WT/ DS580/R/SUPPL.1,and
, , ). Further pursuant to Rules 20(1)
and 21(1) of the Working Procedures for Appellate Review, India simultaneously files this Notice
of Appeal together with its Appellant's Submission with the Appellate Body Secretariat.

2. While India's appeal focuses on certain errors of law committed by the Panel,2 India's choice to
not appeal against any issue must not be construed as India's agreement with the Panel's legal
interpretations or conclusions on such issues.

3. Pursuant to Rule 20(2)(d)(iii) of the Working Procedures, this Notice of Appeal provides an
indicative list of the paragraphs of the Panel Report containing the alleged errors of law and
legal interpretation by the Panel, without prejudice to India's ability to rely on other paragraphs
of the Panel Report in its appeal and associated submissions.

4. For the reasons to be further elaborated in its submissions to the Appellate Body, India appeals
and requests the Appellate Body to reverse, modify, or declare moot and of no legal effect, the
findings, conclusions, rulings and recommendations of the Panel, with respect to the following
errors of law or legal interpretation contained in the Panel Report.

I. THE PANEL ERRED IN FINDING THAT THE MAEQ SCHEME WAS WITHIN ITS TERMS
OF REFERENCE

5. India seeks review by the Appellate Body of the Panel's finding that the "Scheme for providing
assistance to sugar mills for expenses on marketing costs including handling, upgrading and
other processing costs and costs of international and internal transport and freight charges on
the export of sugar " for the 2019 –20 sugar season ( "MAEQ Scheme") is within its terms of
reference. India submits that:

1 The three Panels have issued a common report. The term "Panel Report" or "Report" in this Notice of
Appeal and accompanying Appellant’s Submission refers to the common report of the three Panels.
2 The three Panels have been collectively referred to as the "Panel".
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• The Panel errs in holding that Article 6.2 of the DSU does not set out an express temporal
limitation on the measures that can be identified in a panel request. Under Article 6.2, the
request for the establishment of a panel must identify "the specific measures at issue" and
"a brief summary of the legal basis for the complaint. " It will be impossible to identify a
specific measure in precise and clear terms unless it is in existence.
• Without prejudice to India's views on the meaning of Article 6.2 of the DSU, the Pan el has
failed to demonstrate that the MAEQ Scheme amends one of the existing measures identified
by the complainants in their requests for the establishment of a panel.
• The Panel grossly errs in holding that the MAEQ Scheme is of the "same essence" as other
alleged export subsidies identified in the complainants ' requests for the establishment of a
panel.
• India considers that the Panel has cherry-picked a few broad similarities while ignoring the
differences between MAEQ and the other alleged exports subsidy measures.
• Therefore, not only has the Panel developed an erroneous understanding of whether
measures enacted after the establishment of a panel may be included in a panel 's terms of
reference, but the Panel has also applied such erroneous understanding of the legal standard
in an arbitrary, selective and unjust manner.

6. India requests that the Appellate Body (i) reverse the Panel's interpretive finding, at Annex E-
2, paragraphs 1.18 and 1.19, that measures established after the date of establishment of a
panel, and in this particular case the MAEQ Scheme, can fall within the Panel 's terms of
reference; and Annex E-2, paragraphs 1.42 through 1.52 that the MAEQ Scheme is of the same
essence as other measures alleged to be export subsidies; and (ii) find that the Panel committed
a legal error in issuing findings and recommendations on the MAEQ Scheme with respect to its
consistency with Articles 3.3, 8 and 9.1 (a) of the Agreement on Agriculture ("AoA") and Articles
3.1(a) and 3.2 of the Agr eement on Subsidies and Countervailing Measures ( "SCM
Agreement"), because the MAEQ Scheme was not within the Panel's terms of reference.

II. THE PANEL ERRED IN FINDING THAT INDIA's FAIR AND REMUNERATIVE PRICE AND
STATE ADVISED PRICE CONSTITUTE MARKET PRICE SUPPORT UNDER THE AOA.

7. India seeks review by the Appellate Body of the Panel's finding that India 's Fair and
Remunerative Price and State Advised Price ( "FRP/SAP") measures constitute "market price
support" within the meaning of Annex 3 of the AoA:

• The Panel makes conclusory statements without offering any reasons for its views. The
Panel's reasoning throughout the Panel Report is inconsistent and contradictory.
• The Panel errs in not making a finding on whether market price support is a subsi dy under
paragraph 1 read with paragraph 2 of Annex 3 of the AoA. The Panel has also erred in not
adequately addressing India's arguments with respect to paragraph 2 of Annex 3 of the AoA.
Moreover, the Panel, by choosing to not address what it calls "textual ambiguities" (although
there is no ambiguity whatsoever in the text of paragraphs 1 and 2 of Annex 3 of the AoA)
has abdicated its function of addressing the relevant provisions of the AoA.
• The Panel errs in its reading of the second sentence of paragraph 8 of Annex 3. The
budgetary payments in the second sentence are not in the nature of "applied administered
price" i.e., the price paid for the purchase of the agricultural product.
• The Panel errs in holding that the absence of budgetary outlay as a calculation methodology
in paragraph 8 (unlike paragraphs 10 and 13) strongly suggests that market price support
can exist even in the absence of government expenditure or revenue foregone. Contrary to
the Panel's observations, Annex 4 of the AoA provides circumstances in which budgetary
outlays can be used to calculate market price support.
• The Panel also errs in drawing support from the panel reports in China – Agricultural
Producers and Korea - Various Measures on Beef as these are not relevant and did not
address the issues in the present disputes.
• In light of the above, it is evident that the Panel has not only erred in interpreting relevant
provisions of the AoA but has also acted contrary to its obligations under Article 7.2 and 12
of the DSU.

8. For these reasons, India respectfully requests that the Appellate Body reverse some of the
Panel's interpretative findings (as explained in the Appellant's Submission), in paragraphs 7.52,
7.53, 7.54, 7.55, 7.56, 7.57 and 7.58, 7.59 of the Panel Report. As a result, India also requests
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that the Appellate Body reverse all of the consequential findings of the Panel to this effect in
paragraphs 7.110 and 7.111 of the Panel Report.

9. India also respectfully requests that the Appellate Body find that the Panel erred: (i) by failing
to determine, in the first instance, whether market price support is a subsidy under paragraph
1 of Annex 3 and whether subsidy in paragraph 2 includes priva te expenditures; (ii) in its
analysis of the meaning of the second sentence of paragraph 8 of Annex 3 and import of
alternative methodology to calculate market price support in Annex 4 of the AoA. India also
requests the Appellate Body to find that: (i) p aragraph 1 of Annex 3 identifies market price
support as a subsidy; and (ii) in light of paragraph 2 of Annex 3, subsidies do not include private
expenditures.

III. THE PANEL HAS ERRED IN ITS INTERPRETATION OF ARTICLE 27.2(B) OF THE SCM
AGREEMENT AS APPLICABLE TO DEVELOPING COUNTRY MEMBERS GRADUATING
FROM ANNEX VII(B)

10. India seeks review of the Panel 's interpretation of Article 27.2(b) and Annex VII of the SCM
Agreement. Specifically, India submits that:
• The Panel has erred in finding that Article 27.2(b) of the SCM Agreement does not apply to
developing country Members graduating from Annex VII(b).
• The interpretation developed by the Panel renders express words of Annex VII(b) ineffective
and runs contrary to the object and purpose of the SCM Agreement.
• The interpretation developed by the Panel denies the rights granted to developing country
Members by Annex VII(b) of the SCM Agreement.

11. Consequently, India requests the Appellate Body to reverse the Panel's findings in paragraphs
7.313, 7.314, 7.319, 7.321 and 7.322 that Article 27.2(b) of the SCM Agreement does not apply
to developing country Members graduating from Annex VII(b), and its consequential findings
under Article 3 of the SCM Agreement contained in paragraphs 8.6 and 8.13 of the Panel Report.

12. Further, India requests the Appellate Body to find that developing country Members graduating
from Annex VII(b) are entitled to an eight -year phase-out period for eliminating their export
subsidies.

IV. THE PANEL HAS ERRED IN FINDING THAT THROUGH THE DFIA SCHEME INDIA
PROVIDES SUBSIDIES CONTINGENT ON EXPORT PERFORMANCE INCONSISTENTLY
WITH ARTICLES 3.3 AND 8 OF THE AOA AND ARTICLES 3.1 (A) AND 3.2 OF THE SCM
AGREEMENT

13. India requests that the Appellate Body review the Panel 's findings with respect to the DFIA
Scheme. Specifically, India submits that:

• The Panel erred by finding that the DFIA Scheme does not fall within the scope of footnote
1 of the SCM Agreement.
• The Panel's conclusions are unsupported by the text of footnote 1 read with paragraph (i) of
Annex I of the SCM Agreement which focuses on the quantum of remission or drawback of
import charges. Paragraph (i) of Annex I does not require that inputs which are subject to
remission or drawback of import charges must be the very same inputs that are in fact used
in the production process of an exported product.
• Neither Footnote 61 to Annex II nor paragraph 3 of part II of Annex II require that inputs
that are subject to remission or drawback of import charges must be the very same inputs
that are in fact used in the production process of an exported product.
• The Panel's conclusions are contrary to the objective sought to be achieved by Footnote 1
to the SCM Agreement which is based on the "destination principle" of taxation. The DFIA
Scheme meticulously follows the destination principle.
• The Panel's reading that inputs that are used in t he production process must be the very
same imported inputs that are subject to remission or drawback of import charges makes it
onerous or rather impossible to implement duty remission or drawback schemes.
• Annex III recognises that drawback systems can allow for refund or drawback of import
charges on inputs which are consumed in the production process.
• Paragraph 4 of Part II of Annex III offers the flexibility to exporters to select import
shipments on which drawback is claimed. In other words, an exp orter may first import one
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shipment of inputs, pay the import charges, use those inputs in the production of exported
products but may then subsequently claim drawback on another shipment of inputs.
• The Panel did not even take note of any of the above ar guments of India, let alone give
them any consideration. The Panel 's conclusions are deprived of any basic rationale and
violative of its obligations under Articles 11 and 12.7 of the DSU.

14. Consequently, India requests the Appellate Body to reverse the Panel's findings in paragraphs
7.288, 7.289 and 7.292 that the DFIA does not fall within the scope of Footnote 1 of the SCM
Agreement and its consequential findings under Articles 3 and 8 of the AoA and Article 3 of the
SCM Agreement contained in para graphs 7.297, 7.298, 7.299, 7.300 and 8.6 of the Panel
Report.

15. Further India requests the Appellate Body to find that the DFIA Scheme does not constitute a
subsidy by way of operation of Footnote 1 of the SCM Agreement and consequently does not
constitute a subsidy under the AoA.

V. THE PANEL ERRED IN RECOMMENDING AN ACCELERATED TIME FRAME FOR THE
WITHDRAWAL OF ALLEGED EXPORT SUBSIDIES IN LINE WITH ARTICLE 4.7 OF THE
SCM AGREEMENT

16. India requests that the Appellate Body review the Panel 's findings with respect to the
applicability of accelerated timelines under the SCM Agreement to these disputes. Specifically,
India submits that there exists a conflict between Article 4 of the SCM Agreement and Article
19 of the AoA, which by operation of Article 21 of the AoA must be resolved in favour of the
AoA.

17. Consequently, India requests the Appellate Body to reverse the Panel's findings in paragraphs
6.56 and 6.57 that the relationship between Article 19 of the AoA and Article 4.7 of the SCM
Agreement does not amount to a conflict and that the difference between Article 21.3(c) of the
DSU and Article 19 of the AoA does not give rise to a conflict within the meaning of Article 21.1
of the AoA. Accordingly, India requests the Appellate Body to reverse the Panel 's
recommendations at paragraphs 7.334, 8.11 and 8.17 that India withdraw its prohibited
subsidies under the Pr oduction Assistance, the Buffer Stock, and the Marketing and
Transportation Schemes within 120 days from the adoption of the Panel Report and find that
Article 4.7 does not apply to disputes raised under the AoA.

18. Pursuant to Rule 20(2)(c) of the Working Procedures, the service address, telephone and
facsimile numbers for India are:
The Permanent Mission of India to the World Trade Organization
 Rue du Valais 9,
1202 GENEVA
Tel:022 906 86 86
Telefax:022 738 45 48

19. India is providing a copy of th is Notice of Appeal as well as its Appellant 's Submission directly
to the complainants as well as to all the third parties.

20. There are currently no Appellate Body Members to constitute a division for serving on appeal in
this dispute. In these exceptional circumstances, and in the interests of fairness and orderly
procedure in the conduct of the appeal, in accordance with Rule 1 6(1) and (2) of the Working
Procedures for Appellate Review, India will await further instructions from the division, when it
may eventually be composed, or the Appellate Body, regarding any further steps to be taken
by India in this appeal.

21. Filing o f the Notice of Appeal and the Appellant's Submission by India should be without
prejudice to its right to re-file or amend them once the division becomes operational.

22. India also reserves its right to supplement its Appellant Submission with additional arguments.