INDIA – MEASURES CONCERNING SUGAR AND SUGARCANE REPORTS OF THE PANELS
Date: 14 December 2021
Document codes: WT/DS579/R; WT/DS580/R; WT/DS581/R
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
REPORTS OF THE PANELS
 • •

LIST OF ANNEXES
ANNEX A
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex A-1 Working Procedures of the Panel 5
Annex A-2 Additional Working Procedures for the Panel's First Substantive Meeting to be
Held by Remote Means
13
Annex A-3 Additional Working Procedures for the Panel's Second Substantive Meeting to be
Held by Remote Means
15
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of Brazil 18
Annex B-2 Integrated executive summary of the arguments of Australia 37
Annex B-3 Integrated executive summary of the arguments of Guatemala 59
Annex B-4 Integrated executive summary of the arguments of India 83
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Canada 104
Annex C-2 Integrated executive summary of the arguments of China 108
Annex C-3 Integrated executive summary of the arguments of Costa Rica 110
Annex C-4 Integrated executive summary of the arguments of El Salvador 113
Annex C-5 Integrated executive summary of the arguments of the European Union 116
Annex C-6 Integrated executive summary of the arguments of Japan 119
Annex C-7 Integrated executive summary of the arguments of the United States 122
ANNEX D
COMMUNICATIONS BY THE PANEL REGARDING THE FIRST SUBSTANTIVE MEETING
Contents Page
Annex D-1 Panel's communication to the parties conveying its decision to hold two
substantive meetings, with the first substantive meeting to be held in a "hybrid"
format, as well as proposing the dates, and the adoption of draft additional
working procedures, for the first substantive meeting, dated 16 October 2020
128
Annex D-2 Panel's communication to the parties conveying its decision regarding the
format and the conduct of the first substantive meeting and adopting the
Additional Working Procedures for the Panel's First Substantive Meeting to be
Held by Remote Means, dated 2 November 2020

130
Annex D-3 Panel's communication to the parties addressing India's confidentiality queries
and request for postponement of the first substantive meeting, dated
6 November 2020
133
Annex D-4 Panel's communication to the parties and third parties regarding the
postponement of the first substantive meeting, dated 18 November 2020
135
WT/DS579/R • WT/DS580/R • WT/DS581/R

ANNEX E
PRELIMINARY RULING
Contents Page
Annex E-1 Preliminary Ruling by the Panel concerning India's allegedly expired measures
dated 9 November 2020
138
Annex E-2 Preliminary Ruling by the Panel concerning India's Marketing and Transportation
Scheme
149
WT/DS579/R • WT/DS580/R • WT/DS581/R

 CASES CITED IN THESE REPORTS

Short Title Full Case Title and Citation
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear ,
WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report
WT/DS121/AB/R, DSR 2000:II, p. 575
Argentina – Textiles and
Apparel

Appellate Body Report, Argentina – Measures Affecting Imports of Footwear,
Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted 22 April
1998, DSR 1998:III, p. 1003
Brazil – Aircraft

Appellate Body Report, Brazil – Export Financing Programme for Aircraft,
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, p. 1161
Brazil – Aircraft Panel Report, Brazil – Export Financing Programme for Aircraft , WT/DS46/R,
adopted 20 August 1999, as modified by Appellate Body Report WT/DS46/AB/R,
DSR 1999:III, p. 1221
Canada – Aircraft Appellate Body Report, Canada – Measures Affecting the Export of Civilian
Aircraft, WT/DS70/AB/R, adopted 20 August 1999, DSR 1999:III, p. 1377
Canada – Aircraft (Article
21.5 – Brazil)
Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft –
Recourse by Brazil to Article 21.5 of the DSU , WT/DS70/RW, adopted 4 August
2000, as modified by Appellate Body Report WT/DS7 0/AB/RW, DSR 2000:IX, p.
4315
Canada – Aircraft Credits
and Guarantees
Panel Report, Canada – Export Credits and Loan Guarantees for Regional Aircraft,
WT/DS222/R and Corr.1, adopted 19 February 2002, DSR 2002:III, p. 849
Canada – Dairy Appellate Body Report, Canada – Measures Affecting the Importation of Milk and
the Exportati on of Dairy Products , WT/DS103/AB/R, WT/DS113/AB/R, and
Corr.1, adopted 27 October 1999, DSR 1999:V, p. 2057
Canada – Dairy Panel Report, Canada – Measures Affecting the Importation of Milk and the
Exportation of Dairy Products , WT/DS103/R, WT/DS113/R, adopted 27 October
1999, as modified by Appellate Body Report WT/D S103/AB/R, WT/DS113/AB/R,
DSR 1999:VI, p. 2097
Canada – Dairy (Article 21.5
– New Zealand and US)
Appellate Body Report, Canada – Measures Affecting the Importation of Milk and
the Exportation of Dairy Products – Recourse to Article 21.5 of the DSU by New
Zealand and the United States, WT/DS103/AB/RW, WT/DS113/AB/RW, adopted
18 December 2001, DSR 2001:XIII, p. 6829
Canada – Renewable Energy
/ Canada – Feed-in Tariff
Program
Appellate Body Reports, Canada – Certain Measures Affecting the Renewable
Energy Generation Sector / Canada – Measures Relating to the Feed -in Tariff
Program, WT/DS412/AB/R / WT/DS426/AB/R, adopted 24 May 2013, DSR
2013:I, p. 7
Canada – Renewable Energy
/ Canada – Feed-in Tariff
Program
Panel Reports, Canada – Certain Measures Affecting the Renewable Energy
Generation Sector / Canada – Measures Relating to the Feed -in Tariff Program,
WT/DS412/R and Add.1 / WT/DS426/R and Add.1, adopted 24 May 2013, as
modified by Appellate Body Reports WT/DS412/AB/R / WT/DS426/AB/R, DSR
2013:I, p. 237
Chile - Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures
Relating to Certain Agricultural Pro ducts, WT/DS207/AB/R, adopted 23 October
2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)
China – Agricultural
Producers
Panel Report, China – Domestic Support for Agricultural Producers, WT/DS511/R
and Add.1, adopted 26 April 2019
China – Autos (US) Panel Report, China – Anti-Dumping and Countervailing Duties on Certain
Automobiles from the United States , WT/DS440/R and Add.1, adopted 18 June
2014, DSR 2014:VII, p. 2655
China – HP-SSST (Japan) /
China – HP-SSST (EU)
Appellate Body Reports, China – Measures Imposing Anti -Dumping Duties on
High-Performance Stainless Steel Seamless Tubes ("HP -SSST") from Japan /
China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless
Steel Seamless Tubes ("HP-SSST") from the European Union , WT/DS454/AB/R
and Add.1 / WT/DS460/AB/R and Add.1, adopted 28 October 2015, DSR 2015:IX,
p. 4573
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various
Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted
22 February 2012, DSR 2012:VII, p. 3295
EC – Chicken Cuts Appellate Body Report, European Communities – Customs Classification of Frozen
Boneless Chicken Cuts , WT/DS269/AB/R, WT/DS286/AB/R, adopted 27
September 2005, and Corr.1, DSR 2005:XIX, p. 9157
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti -Dumping
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R,
adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti -Dumping Measures on
Certain Iron or Steel Fasteners from China, WT/DS397/R and Corr.1, adopted 28
WT/DS579/R • WT/DS580/R • WT/DS581/R

Short Title Full Case Title and Citation
July 2011, as modified by Appellate Body Report WT/DS397/AB/R, DSR
2011:VIII, p. 4289
EC – Export Subsidies on
Sugar
Appellate Body Report, European Communities – Export S ubsidies on Sugar ,
WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005,
DSR 2005:XIII, p. 6365
EC and certain member
States – Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States –
Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1 June
2011, DSR 2011:I, p. 7
EC and certain member
States – Large Civil Aircraft
Panel Report, European Communities and Certain Member States – Measures
Affecting Trade in Large Civil Aircraft , WT/DS316/R, adopted 1 June 2011, as
modified by Appellate Body Report WT/DS316/AB/R, DSR 2011:II, p. 685
EC and certain member
States – Large Civil Aircraft
(Article 21.5 - EU)
Panel Report, European Communities and Certain Member States – Measures
Affecting Trade in Large Civil Aircraft – Recourse to Article 21.5 of the DSU by
the European Union and Certain Member States , WT/DS316/RW2 and Add.1,
circulated to WTO Members 2 December 2019 [appealed by the European Union
6 December 2019 – the Division suspended its work on 10 December 2019]
EC and certain member
States – Large Civil Aircraft
(Article 21.5 – US)
Appellate Body Report, European Communities and Certain Member States –
Measures Affecting Trade in Large Civil Aircraft – Recourse to Article 21.5 of the
DSU by the United States, WT/DS316/AB/RW and Add.1, adopted 28 May 2018,
DSR 2018:V, p. 1985
EC and certain member
States – Large Civil Aircraft
(Article 21.5 – US)
Panel Report, European Commun ities and Certain Member States – Measures
Affecting Trade in Large Civil Aircraft – Recourse to Article 21.5 of the DSU by
the United States, WT/DS316/RW and Add.1, adopted 28 May 2018, as modified
by Appellate Body Report WT/DS316/AB/RW, DSR 2018:VI, p. 2519
EC – Selected Customs
Matters
Appellate Body Report, European Communities – Selected Customs Matters ,
WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791
EC – Selected Customs
Matters
Panel Report, European Communities – Selected Customs Matters, WT/DS315/R,
adopted 11 December 2006, a s modified by Appellate Body Report
WT/DS315/AB/R, DSR 2006:IX, p. 3915
EU – PET (Pakistan) Appellate Body Report, European Union – Countervailing Measures on Certain
Polyethylene Terephthalate from Pakistan, WT/DS486/AB/R and Add.1, adopted
28 May 2018, DSR 2018:IV, p. 1615
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding
Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998, DSR
1998:IX, p. 3767
India – Export Related
Measures
Panel Report, India – Export Related Measures , WT/DS541/R and Add.1,
circulated to WTO Members 31 October 2019 [appealed by India 19 November
2019 – the Division suspended its work on 10 December 2019]
Japan – DRAMs (Korea) Appellate Body Report, Japan – Countervailing Duties on Dynamic Random
Access Memories from Korea, WT/DS336/AB/R and Corr.1, adopted 17 December
2007, DSR 2007:VII, p. 2703
Korea – Alcoholic Beverages Panel Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/R, WT/DS84/R,
adopted 17 February 1999, as modified by Appellate Body Report
WT/DS75/AB/R, WT/DS84/AB/R, DSR 1999:I, p. 44
Korea – Pneumatic Valves
(Japan)
Appellate Body Report, Korea – Anti-Dumping Duties on Pneumatic Valves from
Japan, WT/DS504/AB/R and Add.1, adopted 30 September 2019
Korea – Various Measures
on Beef
Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and
Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, DSR
2001:I, p. 5
Korea – Various Measures
on Beef
Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen
Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by
Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, p. 59
Russia – Pigs (EU) Panel Report, Russian Federation – Measures on the Importation of Live Pigs,
Pork and Other Pig Products from the European Union , WT/DS475/R and Add.1,
adopted 21 March 2017, as modified by Appellate Body Report WT/DS475/AB/R,
DSR 2017:II, p. 361
Thailand – Cigarettes
(Philippines) (Article 21.5 –
Philippines)
Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the
Philippines – Recourse to Article 21.5 of the DSU by the Philippines ,
WT/DS371/RW and Add.1, circulated to WTO Members 12 November 2018
[appealed by Thailand 9 January 2019 – the Division suspended it s work on 10
December 2019]
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany , WT/DS213/AB/R
and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779
US – Carbon Steel (India) Appellate Body Report, United States – Countervailing Measures on Certain Hot-
Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R, adopted 19
December 2014, DSR 2014:V, p. 1727
WT/DS579/R • WT/DS580/R • WT/DS581/R

Short Title Full Case Title and Citation
US – Corrosion-Resistant
Steel Sunset Review
Appellate Body Report, United States – Sunset Review of Anti -Dumping Duties
on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R,
adopted 9 January 2004, DSR 2004:I, p. 3
US – Countervailing and
Anti-Dumping Measures
(China)

Appellate Body Report, United States – Countervailing and Anti -Dumping
Measures on Certain Products from China, WT/DS449/AB/R and Corr.1, adopted
22 July 2014, DSR 2014:VIII, p. 3027
US – Countervailing
Measures (China)
Appellate Body Report, United States – Countervailing Duty Measures on Certain
Products from China, WT/DS437/AB/R, adopted 16 January 2015, DSR 2015:I,
p. 7
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, p. 1619
US – FSC Panel Report, United States – Tax Treatment for "Foreign Sales Corporations" ,
WT/DS108/R, adopted 20 March 2000, as modified by Appellate Body Report
WT/DS108/AB/R, DSR 2000:IV, p. 1675
US – FSC (Article 21.5 –
EC)
Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations" – Recourse to Article 21.5 of the DSU by the European
Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, p. 55
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross -Border
Supply of Gambling and Betting Services , WT/DS285/AB/R, adopted 20 April
2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)
US – Large Civil Aircraft
(2nd complaint)
Appellate Body Report, United States – Measures Affecting Trade in Large Civil
Aircraft (Second Complaint) , WT/DS353/AB/R, adopted 23 March 2012, DSR
2012:I, p. 7
US – Large Civil Aircraft
(2nd complaint)
Panel Report, United States – Measures Affecting Trade in Large Civil Aircraft
(Second Complaint) , WT/DS353/R, adopted 23 March 2012, as modified by
Appellate Body Report WT/DS353/AB/R, DSR 2012:II, p. 649
US – Shrimp (Viet Nam) Panel Report, United States – Anti-Dumping Measures on Certain Shrimp from
Viet Nam, WT/DS404/R, adopted 2 September 2011, DSR 2011:X, p. 5301
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty Determination
with Respect to Certain Softwood Lumber from Canada , WT/DS257/AB/R,
adopted 17 February 2004, DSR 2004:II, p. 571
US – Renewable Energy Panel Report, United States – Certain Measures Relating to the Renewable Energy
Sector, WT/DS510/R and Add.1, circulated to WTO Members 27 June 2019
[appealed by the United States 15 August 2019 – the Division suspended its work
on 10 December 2019]
US – Tariff Measures
(China)
Panel Report, United States – Tariff Measures on Certain Goods from China ,
WT/DS543/R and Add.1, circulated to WTO Members 15 September 2020
[appealed by the United States 26 October 2020]
US – Tax Incentives Panel Report, United States – Conditional Tax Incentives for Large Civil Aircraft ,
WT/DS487/R and Add.1, adopted 22 September 2017, as modified by Appellate
Body Report WT/DS487/AB/R, DSR 2017:V, p. 2305
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton ,
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, p. 3
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R, Add.1
to Add.3 and Corr.1, adopt ed 21 March 2005, as modified by Appellate Body
Report WT/DS267/AB/R, DSR 2005:II, p. 299
US – Zeroing (Japan)
(Article 21.5 – Japan)
Appellate Body Report, United States – Measures Relating to Zeroing and Sunset
Reviews – Recourse to Article 21.5 of the DSU by Japan , WT/DS322/AB/RW,
adopted 31 August 2009, DSR 2009:VIII, p. 3441
WT/DS579/R • WT/DS580/R • WT/DS581/R

EXHIBITS REFERRED TO IN THESE REPORTS
Exhibit
No.
Short title Title
AUS-1
(revised 23
March
2021)
Australia's Domestic Support
Calculations

Australia's domestic support calculations, Microsoft Excel
workbooks, Revision 3
AUS-8,
GTM-31
Rangarajan Committee Report "Report of the Committee on the Regulation of Sugar
Sector in India: The Way Forward", 5 October 2012
(Rangarajan Committee Report)
AUS-15 Press Release, Press Information
Bureau, 31 July 2018
Press Information Bureau, Ministry of Consumer Affairs,
Food and Public Distribution, "Fair and Remunerative
Price of Sugarcane" (Press Release), 31 July 2018
AUS-17 Order of 22 October 2013 Order G.S.R. 697(E)/Ess.Com./Sugarcane, Ministry of
Consumer Affairs, Food and Public Distribution, 22
October 2013
AUS-19 Notification of 1 October 2015

Order G.S.R. 752(E), Ministry of Consumer Affairs, Food
and Public Distribution, 1 October 2015
AUS-20 Notification of 30 September
2016
Notification G.S.R. 932(E), Ministry of Consumer Affairs,
Food and Public Distribution, 30 September 2016
AUS-22 Notification of 27 September
2017
Notification G.S.R. 1205(E), Ministry of Consumer Affairs,
Food and Public Distribution, 27 September 2017
AUS-38 - Customs Tariff Act 1975
AUS-40 Foreign Trade Policy 2015-2020 Notification 01/2015-2020, Foreign Trade Policy, 2015-
2020
AUS-41 Amendment to the Foreign Trade
Policy 2015-2020
Notification No. 57/2015-2020, Department of
Commerce, 28 March 2018
AUS-45 DFPD Functions Government of India, Department of Food and Public
Distribution, Ministry of Consumer Affairs, Food and
Public Distribution, "Functions (As per Allocation of
Business Rules)", https://dfpd.gov.in/fun.htm
AUS-48 Notes on Demands for Grants,
2018-2019
Central Government of India's 2018-19 Expenditure
Budget
AUS-49 - First Advance Estimates of Production of Foodgrains for
2019-20, Ministry of Agriculture and Farmers Welfare, 23
September 2019
AUS-52 Karnataka Sugarcane Act Karnataka Sugarcane (Regulation of Purchase and
Supply) Act 2013
AUS-54 Order of 24 July 2018 Order G.O.(Ms).No.191, Government of Tamil Nadu,
Agriculture (S1) Department, 24 July 2018
AUS-63 Notification by the Haryana
Government, 8 March 2019
Notification No. 649-Agri.II(3)-219/3493, Haryana
Government, Agriculture and Farmers Welfare
Department, 8 March 2019
AUS-66 "Punjab Govt to pay Rs 25 per
quintal directly to cane farmers",
The Tribune, 6 December 2018
"Punjab Govt to pay Rs 25 per quintal directly to cane
farmers", The Tribune, 6 December 2018,
https://www.tribuneindia.com/news/archive/pvt-sugar-
mill-owners-to-clear-payments-of-cane-growers-capt-
amarinder-693812
BRA-1
(revised-3)
- Brazil's Calculation of India's Domestic Support for
Sugarcane
GTM-19 Mr. Tarun Sawhney, President of
ISMA, "The Current Sugarcane
Pricing Policy & its Critical
Analysis"
Mr. Tarun Sawhney, President of ISMA, "The Current
Sugarcane Pricing Policy & its Critical Analysis" available
at
https://indiansugar.com/PDFS/Current_sugarcane_pricin
g_policy__0405-Tarun_Sawhney.pdf, last accessed on
14.01.2020
GTM-22 Priyanka Singh, Manmohan Singh
and BL Sharma, "Variation in
sugar content between early and
mid-late maturing sugarcane
varieties across the crushing
period in sub-tropical India",
Proceedings of the International
Society of Sugar Cane
Technologists, volume 29, 2016
Priyanka Singh, Manmohan Singh and BL Sharma,
"Variation in sugar content between early and mid-late
maturing sugarcane varieties across the crushing period
in sub-tropical India", Proceedings of the International
Society of Sugar Cane Technologists, volume 29, 2016,
available at
https://www.researchgate.net/publication/311986635_Va
riation_in_sugar_content_between_early_and_mid-
late_maturing_sugarcane_varieties_across_the_crushing
WT/DS579/R • WT/DS580/R • WT/DS581/R

Exhibit
No.
Short title Title
_period_in_sub-tropical_India, last accessed on
15.01.2020
GTM-28 Karnataka Sugarcane Amendment
Act
The Karnataka Act No. 28 of 2014, The Karnataka
Sugarcane (Regulation of Purchase and Supply)
(Amendment) Act, 2014
GTM-45
(revised 12
May 2021)
- Guatemala's calculations of India's AMS Revision 12 May
2021 (Revision 12 May 2021)
IND-4 Communication from the
Government of India of 18 March
2020
Communication F. No. 21(3)/2019-SP-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution, dated 18 March 2020
IND-5 Notification from the Ministry of
Finance of 14 November 2018
(Goods and Services Tax
Compensation)
Gazette of India, Notification No. 1/2018 (Goods and
Services Tax Compensation), G.S.R. 1116(E), Ministry of
Finance, Department of Revenue, 14 November, 2018
IND-15 DFPD's Letter to Food Corporation
of India of 25 June 2019
Communication from Department of Food & Public
Distribution dated 25 June 2019 to Food Corporation of
India
IND-16 DFPD's Letter to Ministry of
Railways of 26 June 2019
Communications from Department of Food & Public
Distribution dated 26 and 27 June 2019 to Ministry of
Railways
IND-17 DFPD's Office Memorandum to
MMTC of 11 July 2019
Communication from Department of Food & Public
Distribution dated 11 July 2019 to Metals and Minerals
Trading Corporation of India Ltd.
IND-18 DFPD's Office Memorandum to
STC of 11 July 2019
Communication from Department of Food & Public
Distribution dated 11 July 2019 to State Trading
Corporation of India Ltd.
IND-21 Foreign Trade Policy, Handbook of
Procedures 2015-20
Chapter 4, Foreign Trade Policy 2015-20, Handbook of
Procedures
IND-23 Office Memorandum from Ministry
of Railways to DFPD of 28 June
2019
Ministry of Railways Office Memorandum dated 28 June
2019
IND-24 - Application Form ANF - 4G for issue of Transferable Duty-
Free Import Authorisation (DFIA)
IND-25 - Appendix 4H, Register for accounting the consumption
and stocks of duty free imported or domestically procured
raw materials, components, etc., allowed under Advance
Authorisation/DFIA, Foreign Trade Policy, Handbook of
Procedures
JE-2 DFPD Communication: Fixation of
FRP 2014-15 season, 14 February
2014
Ministry of Consumer Affairs, Food & Public Distribution,
Fixation of Fair and Remunerative Price payable by sugar
mills for 2014-15 sugar season, 14 February 2014
JE-3 Press Release, Press Information
Bureau, 16 January 2015
Cabinet Committee on Economic Affairs (CCEA),
Determination of Fair and Remunerative Price payable by
sugar mills for 2015-16 sugar season, 16 January 2015
JE-4 DFPD Communication: Fixation of
FRP for 2015-16 season, 2
February 2015
Ministry of Consumer Affairs, Food & Public Distribution,
Fixation of Fair and Remunerative Price payable by sugar
mills for 2015-16 sugar season, 2 February 2015
JE-5 CACP Price Policy for Sugarcane:
2016-17 Sugar Season
CACP, Price Policy for Sugarcane (the 2016-17 Sugar
Season), August 2015
JE-6 Press Release, Press Information
Bureau, 24 May 2017
CCEA, A farmer friendly step Cabinet approves Fair and
Remunerative Price payable by sugar mills for 2017-18
sugar season, 24 May 2017
JE-7 DFPD Communication: Fixation of
FRP for 2017-18 season, 1 June
2017
Ministry of Consumer Affairs, Food & Public Distribution,
Fixation of Fair and Remunerative Price payable by sugar
mills for 2017-18 sugar season, 1 June 2017
JE-8 Press Release, Press Information
Bureau, 18 July 2018
CCEA, Determination of Fair and Remunerative Price
payable by sugar mills for 2018-19 sugar season, 18 July
2018
JE-9 DFPD Communication: Fixation of
FRP for 2018-19 sugar season, 20
July 2018
Communication No. 3(1)/2017-SP-I, Ministry of
Consumer Affairs, Food and Public Distribution, 20 July
2018
JE-11 Fair and Remunerative Price of
Sugarcane in the Country, ISMA
Indian Sugar Mills Association, "Fair and Remunerative
Price of Sugarcane in the Country"
JE-43 Essential Commodities Act The Essential Commodities Act 1955
JE-44 Sugar (Control) Order, 1966 The Sugar (Control) Order 1966
JE-45 Sugarcane (Control) Order The Sugarcane (Control) Order 1966 (Amended to 2013)
WT/DS579/R • WT/DS580/R • WT/DS581/R

Exhibit
No.
Short title Title
JE-47 "Govt keeps cane FRP unchanged
at Rs 230 per qtl for 2016-17",
India Today, 6 April 2016
India Today, "Govt keeps cane FRP unchanged at Rs 230
per qtl for 2016-17", 6 April 2016
JE-48 - Practical Action technical brief: Sugar Production from
Sugar Cane
JE-49 - Judgement of the Supreme Court of India, U.P. Co-
operative Cane Unions Federations v. West U.P. Sugar
Mills Association & Ors. Etc., 5 May 2004
JE-50 Bihar Sugarcane Act Bihar Sugarcane (Regulation of Supply and Purchase) Act
1981
JE-52 CACP Price Policy for Sugarcane:
2018-19 Sugar Season
CACP, Price Policy for Sugarcane (2018-19 sugar
season), August 2017
JE-53 CACP Price Policy for Sugarcane:
2019-20 Sugar Season
CACP, Price Policy for Sugarcane (2019-20 sugar
season), August 2018
JE-54-B Notification by the Bihar
Government, 24 November 2016
(English translation)
Notification No. 2-02/2007-2316 of the State government
of Bihar, 24 November 2016 (English translation)
JE-55 - Riga Sugar Company Limited, Annual Report 2018-19
JE-56 Haryana Amendment Act; or
Haryana Sugarcane Act
Punjab Sugarcane (Regulation of Purchase and Supply)
Haryana Amendment Act 2004
JE-57 Haryana Sugarcane Rules Haryana Sugarcane (Regulation of Purchase and Supply)
Rules 1992
JE-58 State of Haryana, Budget
2019-20: Explanatory
Memorandum
Finance Department of the State of Haryana, Budget
2019-20: Explanatory Memorandum on Welfare and
Development Schemes
JE-59 Punjab Sugarcane Act Punjab Sugarcane (Regulation of Purchase and Supply)
Act 1953
JE-60 Punjab Sugarcane Rules Punjab Sugarcane (Regulation of Purchase and Supply)
Rule 1958
JE-61 Notification by the Punjab
Government, 28 November 2019
Notification of the State Government of Punjab, SAP for
the 2018/19 season, 28 November 2019
JE-62 Order of 14 January 2015 Order G.O.(Ms).No.15 of the Agriculture (S1) Department
of the Government of Tamil Nadu of 14 January 2015
JE-63 Order of 11 January 2016 Order G.O.(Ms).No.20 of the Agriculture (S1) Department
of the Government of Tamil Nadu of 11 January 2016
JE-64 Order of 5 January 2017 Order G.O.(Ms).No.5 of the Agriculture (S1) Department
of the Government of Tamil Nadu of 5 January 2017
JE-65 - Tamil Nadu Sugarcane (Regulation of Purchase Price) Act
2018
JE-67 Tamil Nadu Sugarcane Act Tamil Nadu Sugar Factories Control Act 1949
JE-68 Uttar Pradesh Sugarcane Act Uttar Pradesh Sugarcane (Regulation of Supply and
Purchase) Act 1953
JE-69-B Notification of 1 December 2018
(English translation)
Notification No. 24/2018/2077/46-3-18-3(48)/98-99 of
the State government of Uttar Pradesh, 1 December
2018 (English translation)
JE-70-B Notification of 26 October 2017
(English translation)
Notification No. 2489/46-3-17-3(48)/98-99 issued by the
Sugar Industry Section-3, Government of Uttar Pradesh,
26 October 2017 (English translation)
JE-71 Uttarakhand Amendment Act Uttarakhand Sugarcane (Regulation of Supply and
Purchase) (Amendment) Act 2013
JE-72-B Notification of 20 December 2018
(English translation)
Notification 788/XIV-2/2018/07(6)/2013 of the State
government of Uttarakhand, 20 December 2018 (English
translation)
JE-74 Notification of 5 October 2018 Notification No. 1(14)/2018-S.P.-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 5 October 2018 ("Scheme
for assistance to sugar mills")
JE-75 Notification of 9 May 2018 Notification No. 1(5)/2018-S.P.-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 9 May 2018
JE-76 Notification of 2 December 2015 Notification No. 20(43)/2015-S.P.-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 2 December 2015
JE-77 Notification of 31 July 2019 Notification No. 1(8)/2019-SP-I. of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 31 July 2019
WT/DS579/R • WT/DS580/R • WT/DS581/R

Exhibit
No.
Short title Title
JE-78 Notification of 15 June 2018 Notification No. 1(6)/2018-SP-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 15 June 2018
JE-85 Andhra Pradesh Budget Estimates
for the 2018-19 financial year
The State of Andhra Pradesh's Budget Estimates 2018-19
for Industries and Commerce Department
JE-86 Andhra Pradesh Budget Estimates
for the 2015-16 financial year
The State of Andhra Pradesh’s Budget Estimates 2015-16
for Industries and Commerce Department
JE-88 Order of 17 September 2018 Notification of the Agriculture Department of the State
government of Tamil Nadu of 17 September 2018
JE-89 Budget Speech of 15 March 2018 Speech of Thiru O. Panneerselvam, Hon’ble Deputy Chief
Minister, Government of Tamil Nadu, presenting the
Budget for the year 2018-2019 to the Legislative
Assembly on 15th March 2018
JE-90 Karnataka Budget Estimates for
the 2019-20 financial year
The State government of Karnataka's Detailed Budget
Estimates of Expenditure for the year 2019-20
JE-107 MIEQ Order of 28 March 2018 DFPD Order of 28 March 2018, "Allocation of sugar
factory-wise Minimum Indicative Export Quotas (MIEQ)
under tradable export scrip schemes"
JE-108 MIEQ Order of 28 September
2018
DFPD Order of 28 September 2018, "Allocation of sugar
factory-wise Minimum Indicative Export Quotas (MIEQ) of
sugar for export in sugar season 2018-19 under tradable
export scrip schemes"
JE-109 MIEQ Order of 18 September
2015

DFPD Order of 18 September 2015, "Allocation of sugar
factory-wise Minimum Indicative Export Quotas (MIEQ)
under tradable export scrip schemes"
JE-111 Notification of 9 May 2018 Notification No. 1(4)/2018-S.P.-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 9 May 2018
JE-112 Notification of 31 December 2018 Notification No. 1(6)/2018-SP-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 31 December 2018
JE-113 Cabinet Committee on Economic
Affairs Announcement of Sugar
export policy for evacuation of
surplus stocks during sugar
season 2019-20
CCEA, "Cabinet approves Sugar export policy for
evacuation of surplus stocks during sugar season 2019-
20: about 60 lakh tons sugar to be exported this financial
year", 28 August 2019
JE-114 Notification of 12 September
2019
Notification No. 1(14)/2019-S.P.-I. of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 12 September 2019
JE-115 MAEQ Order of 16 September
2019
Notification F.No.1(14)/2019-SP-I of the Ministry of
Consumer Affairs, Food & Public Distribution, Department
of Food & Public Distribution of 16 September 2019
JE-118 World Customs Organization, HS
Nomenclature 2017 edition
World Customs Organization, HS Nomenclature, 2017
edition,
http://www.wcoomd.org/en/topics/nomenclature/instrum
ent-and-tools/hs-nomenclature-2017-edition/hs-
nomenclature-2017-edition.aspx
JE-121 Notes on Demands for Grants,
2019-2020
The Central Government of India's 2019-20 Expenditure
Budget
JE-134 Andhra Pradesh Budget Estimates
for the 2016-17 financial year
The State of Andhra Pradesh's Budget Estimates for
Industries and Commerce Department 2016-2017
JE-135 Andhra Pradesh Budget Estimates
for the 2017-18 financial year
State of Andhra Pradesh's Budget Estimates for
Industries and Commerce Department 2017-18
JE-136 Order of 7 March 2019 Government of Tamil Nadu, Agriculture (S1) Department,
Order G.O.(Ms) No.61, 7 March 2019
JE-137 Tamil Nadu Budget Publication for
the 2019-2020 financial year
The State of Tamil Nadu's 2019-2020 Budget publication-
Industries Department
JE-139 Cane Commissioner's Annual
Report, 2017-18
Annual Report of the Commissioner for Cane
Development and Director of Sugar for the Year 2017-18
JE-140 - Directorate of Sugarcane Development, Sugarcane in
India: State wise Production
JE-141 - Department of Agriculture & farmers Welfare, 1st
advance estimates for 2019-20
JE-142 Notes on Demands for Grants,
2020-2021
Expenditure Budget 2020–2021 for the Department of
Food and Public Distribution, Ministry of Consumer
Affairs, Food and Public Distribution
JE-146 Andhra Pradesh Budget Estimates
for the 2019-20 financial year
State of Andhra Pradesh's Budget Estimates for
Industries and Commerce Department 2019-20
WT/DS579/R • WT/DS580/R • WT/DS581/R

Exhibit
No.
Short title Title
JE-147 MOSPI, National Accounts
Statistics 2020, Statement 8.1.2
Crop-wise value of output
Ministry of Statistics and Programme Implementation
(MOSPI), National Accounts Statistics 2020, Statement
8.1.2 Crop-wise value of output
JE-148 Sugarcane (Control) Order 1966
(prior to 2009)
The Sugarcane (Control) Order 1966 (prior to 2009)
JE-149 - Dhampur Sugar Mills Limited Annual Report 2019-20
JE-156 - Chairman's note on options in the agricultural
negotiations, MTN.GNG/AG/W/1/Add.4
JE-157 - Balrampur Chini Mills Limited Annual Report 2019-20
JE-158 - Avadh Sugar & Energy Limited Annual Report 2019-20
JE-159 International Chamber of
Commerce (ICC), Incoterms
Rules
International Chamber of Commerce (ICC), Incoterms
Rules, Rules for any mode or modes of transport
JE-160 - Tender Notice for Export of Sugar (Jawahar S.S.S.K. Ltd)
JE-161 - Tender Notice for Sale of Raw Sugar or White Sugar for
Export (Shree Datta S.S.S.K. Ltd)
JE-162 - HPCL Biofuels Ltd Sugar Export Contracts Specifications
JE-163 - Reuters, "Indian sugar mills clinch export deals as prices
jump – industry", 7 January 2021
JE-164 - Reuters, "Indian sugar exports poised to hit record 5
million tonnes this year", 17 December 2019
JE-165 Consultancy Report, February
2021
Green Pool Commodity Specialists, Consultancy Report,
February 2021

JE-167 CACP Price Policy for Sugarcane:
2020-21 Sugar Season
CACP, Price Policy for Sugarcane (2020-21 sugar
season), November 2019
JE-168 MOSPI, National Accounts
Statistics Sources and Methods
2007, Chapter 9
National Accounts Statistics Sources and Methods 2007,
Chapter 9
JE-169 Tamil Nadu Policy Note 2020-21 Agriculture Department of the Government of Tamil
Nadu, Policy Note 2020-2021
JE-170 - Andhra Pradesh Budget Manual
JE-172 - Karnataka Budget Manual
JE-173 Karnataka Budget Estimates for
the 2020-21 financial year
Karnataka Detailed Budget Estimates of Expenditure –
Demand-wise for the Year 2020-21, Volume 6
WT/DS579/R • WT/DS580/R • WT/DS581/R

ABBREVIATIONS USED IN THESE REPORTS
Abbreviation Description
AAP Applied Administered Price
AMS Aggregate Measurement of Support
CACP Commission for Agricultural Costs and Prices
DFIA Duty Free Imports Authorisation
DFPD Department of Food and Public Distribution
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
FERP Fixed External Reference Price
FRP Fair and Remunerative Price
GATT 1994 General Agreement on Tariffs and Trade 1994
HS Harmonized System
INR Indian Rupees
MAEQ Maximum Admissible Export Quantity
MIEQ Minimum Indicative Export Quotas
MMTC Metals and Minerals Trading Corporation of India Limited
MOSPI Ministry of Statistics and Programme Implementation
MPIA Multi-Party Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU
QEP Quantity of Eligible Production
SAP State-Advised Price
SCM Agreement Agreement on Subsidies and Countervailing Measures
SCM Committee Committee on Subsidies and Countervailing Measures
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 UNTS
331; 8 International Legal Materials 679
WTO World Trade Organization
WT/DS579/R • WT/DS580/R • WT/DS581/R

1 INTRODUCTION
1.1 Complaint by Brazil
1.1. On 27 February 2019, Brazil requested consultations with India pursuant to Articles 1 and 4 of
the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article 19
of the Agreement on Agriculture, and Article XXII:1 of the General Agreement on Tariffs and Trade
1994 (GATT 1994), with respect to the measures and claims set out below.1
1.2. Consultations were held on 15 April 2019 but failed to resolve the dispute.
1.2 Complaint by Australia
1.3. On 1 March 2019, Australia requested consultations with India pursuant to Articles 1 and 4 of
the DSU, Article 19 of the Agreement on Agriculture, Articles 4 and 30 of the Agreement on Subsidies
and Countervailing Measures (SCM Agreement), and Article XXII:1 of the GATT 1994, with respect
to the measures and claims set out below.2
1.4. Consultations were held on 16 April 2019 but failed to resolve the dispute.
1.3 Complaint by Guatemala
1.5. On 15 March 2019, Guatemala requested consultations with India pursuant to Article 4 of the
DSU, Article 19 of the Agreement on Agriculture , Articles 4 and 30 of the SCM Agreement, and
Article XXII of the GATT 1994, with respect to the measures and claims set out below.3
1.6. Consultations were held on 22 May 2019 but failed to resolve the dispute.
1.4 Panel establishment and composition
1.7. On 11 July 2019, Brazil, Australia, and Guatemala each requested the establishment of a panel
pursuant to Article 6 of the DSU with standard terms of reference. 4 At its meeting on
15 August 2019, the Dispute Settlement Body (DSB) established three panels pursuant to the
requests of Brazil, Australia, and Guatemala in document s WT/DS579/7, WT/DS580/7, and
WT/DS581/8, respectively, in accordance with Article 6 of the DSU.5
1.8. The Panels' terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Brazil in document
WT/DS579/7 and to make such findings as will assi st the DSB in making the
recommendations or in giving the rulings provided for in those agreements.6
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Australia in document
WT/DS580/7 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.7
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Guatemala in document

1 See WT/DS579/1, G/AG/GEN/151, G/L/1298.
2 See WT/DS580/1, G/L/1299, G/AG/GEN/152, G/SCM/D124/1.
3 See WT/DS581/1, G/AG/GEN/153, G/SCM/D125/1, G/L/1302.
4 WT/DS579/7, WT/DS580/7, and WT/DS581/8.
5 See WT/DSB/M/433.
6 WT/DS579/8.
7 WT/DS580/8.
WT/DS579/R • WT/DS580/R • WT/DS581/R

WT/DS581/8 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.8
1.9. On 16 October 2019, Br azil, Australia, and Guatemala requested the Director -General to
determine the composition of the Panels, pursuant to Article 8.7 of the DSU . On 28 October 2019,
the Director-General accordingly composed three Panels, of the same persons, as follows:
Chairperson: Mr Thomas Cottier

Members: Ms Gerda Van Dijk
 Mr Roberto Zapata Barradas

1.10. Canada, China, Colombia, Costa Rica, El Salvador, the European Union, Honduras, Indonesia,
Japan, Panama, the Russian Federation, Thailand, and the United States reserved their rights to
participate as third parties in all three Panel proceedings. In addition, each of the three complainants
reserved its right to participate as a third party in the Panel proceedings initiated by the other two
complainants.
1.5 Panel proceedings
1.5.1 General
1.11. The Panel9 held an organizational meeting with the parties on 22 November 2019.
1.12. After consulting with the parties, the Panel adopted its Working Procedures10 and timetables
on 5 December 2019. Pursuant to Article 9.3 of the DSU, the timetables in the three disputes were
harmonized.
1.13. Brazil, Australia, and Guatemala ("the complainants") submitted their first written
submissions on 16 January 2020. India submitted its first written submission on 19 March 2020.
1.14. On 9 April 2020, the Panel received third -party submissions from Canada, Costa Rica,
El Salvador, the European Union, and the United States.
1.15. The first substantiv e meeting of the Panel was postponed on several occasions, due to the
COVID-19 pandemic.11 In addition, while the first substantive meeting was postponed until further
notice, the Chairperson of the Panel informed the parties, on 9 June 2020, in accordance with the
Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of
Disputes, that he had been nominated by Switzerland to be included in the pool of arbitrators of the
Multi-Party Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU (MPIA). In this
communication, the Chairperson noted that the complainants, and certain third parties in these
proceedings, were parties to the M PIA. In this connection, the Chairperson informed the parties of
his intention to conduct himself, at all times, in a way that would fully respect his personal
independence and impartiality in his role as Chairperson, as well as the confidentiality of these
proceedings. In the interest of full transparency, t he Chairperson invited the parties to raise any
questions or concerns regarding this matter. This was followed by a number of communications that
took place between the Chairperson and the parties in th e period between 9 June 2020 and
1 October 2020.12 On 30 September 2020, India sent a final communication to the Chairperson,
indicating that, notwithstanding his MPIA appointment, India believed that the Chairperson would
continue to discharge his functions independently and impartially. India also indicated its trust that

8 WT/DS581/9.
9 For the reader's convenience, the Panels in DS579, DS580, and DS581 are herein collectively ref erred
to as the "Panel". Additionally, any references to "this Report" or the Panel's "Report" should be understood to
refer to the Panel's Final (or, where applicable, Interim) Reports in all three disputes.
10 See the Panel's Working Procedures in Annex A-1.
11 See section 1.5.2 below.
12 In a communication dated 7 August 2020, the Chairperson informed the parties of his appointment ,
and his acceptance, to serve as an arbitrator under the MPIA.
WT/DS579/R • WT/DS580/R • WT/DS581/R

the proceedings would be conducted fairly and fully respecting India's due process rights as a
developing country and as respondent in the present disputes.13
1.16. The Panel held its first substantive meeting with the parties on 8-11 December 2020 . A
session with the third parties took place on 10 December 2020. Prior to the substantive meeting, on
9 November 2020, the Panel sent the parties a list of questions to be answered orally at the meeting.
Following the meeting, on 14 December 2020, the Panel sent written questions to the parties.
Written responses to these questions were received on 14 January 2021.
1.17. The parties submitted their second written submissions on 11 February 2021.
1.18. The Panel held its second substantive meeting with the parties on 23-25 March 2021. Prior to
the substantive meeting, on 8 March 2021, the Panel sent the parties a list of questions to be
answered orally at the meeting. Following the meeting, on 26 March 202 1, the Panel sent written
questions to the parties. On the same date, Guatemala sent three written questions to India. Written
responses to the Panel's questions were received on 22 April 2021. Written responses to Guatemala's
questions were received on 29 April 2021.14 The Panel gave the parties an opportunity to comment
on each other's responses. These comments were received on 12 May 2021.
1.19. On 3 June 2021, the Panel issued the descriptive part of its Report to the par ties. On
22 July 2021, the Panel issued its Interim Report to the parties. Following the interim review process,
on 30 September 2021, the Panel issued its Final Report to the parties.
1.5.2 The Panel's substantive meetings held by remote means
1.20. The COVID-19 pandemic disrupted the Panel's work, resulting in a n overall delay of seven
months.15 In order to advance the proceedings, and in light of the requirements of Article 3.3 of the
DSU, the Panel held its first and second substantive meetings by remote means. Parties and third
parties, as well as the Panel and WTO Secretariat staff, participated in the meeting remotely, via
Cisco Webex videoconferencing technology. The Panel adopted additional working procedures for its
first and second substantive meeting s, after consulting with the parties, as provided for in
Article 12.1 of the DSU.
1.21. This section provides an overview of the process leading to the Panel's decision to conduct its
first and second substantive meetings remotely.
1.5.2.1 First substantive meeting with the parties and third parties
1.22. The first substantive meeting of the Panel was initially scheduled for 12-14 May 2020. Due to
the COVID-19 pandemic, Switzerland and other countries, including parties and third parties in these
disputes, imposed restrictive measures on international travel and in-person gatherings. Moreover,
on 3 April 2020, the Director -General informed WTO Memb ers and Observers that all WTO staff
members (with the exception of on -site critical staff) were requested to work from home and that
all meetings at the WTO were suspended until the end of April 2020.16 The suspension of meetings
among delegates was extended on several occasions.17 It therefore appeared unlikely that the Panel

13 India's communication regarding the Chairperson's MPIA appointment, 30 September 2020, paras. 7-8.
14 On 28 April 2021, Guatemala requested that the Panel put on record India's lack of response to
Guatemala's questions following the second substantive meeting. India indicated that it had inadvertently missed
to submit its responses to Guatemala's questions and that, in any event, it "had clarified its position with respect
to these questions during the second virtual meeting". (India's cover letter transmitting its responses to
Guatemala's questions following the second substantive meeting of the Panel, 29 April 2021)
15 Seven months passed between the dates on which the first substantive meeting was originally scheduled
to take place, and the dates on which the first substantive m eeting actually took place. See para s. 1.22 and
1.30 below.
16 Director-General Azevêdo's communication to WTO Members and Observers, 3 April 2020.
17 See e.g. D eputy Director-General Brauner's communication to Heads of Delegation, 7 May 2020,
confirming the suspension of meetings until the end of May 2020. This suspension was maintained through
subsequent communications. As of 15 June 2020, meetings among delegates at the WTO premises were allowed,
albeit subject to certain restrictions that have since been changing in light of the recommendations by Swiss
authorities and the WTO Health Task Force. (See e.g. Deputy Director-General Brauner's communication to Heads
of Delegation, 4 June 2020)
WT/DS579/R • WT/DS580/R • WT/DS581/R

would be able to hold its first substantive meeting as originally scheduled with all parties and third
parties physically present at the WTO premises.
1.23. On 9 April 2020, the Pane l proposed to the parties to conduct the first substantive meeting
through a written procedure. The complainants agreed with the proposal , arguing it would be
consistent with the DSU and would not prejudice the rights of the parties or third parties .18 India
disagreed and requested that the meeting be postponed until conditions would permit in-person
gatherings. India argued that conducting the meeting through a written procedure amidst the
COVID-19 crisis would undermine India's due process rights and limit its ability to meaningfully
participate, and defend itself adequately, in the proceedings.19
1.24. Following another round of comments by the parties 20, and the receipt of comments by the
third parties21, the Panel decided, on 4 May 2020 , to postpone its first substantive meeting until
further notice. To facilitate its work on the dispute s, on 25 May 2020, the Panel sent questions to
the parties concerning certain factual and legal issues, pursuant to paragraph 9 of the Working
Procedures and Article 13 of the DSU. The Panel indicated that t hese questions did not substitute
the first substantive meeting. The parties submitted written r esponses to those questions on
18 June 2020.
1.25. On 2 October 2020, given the continuing health risks resulting from the COVID-19 pandemic
and the travel restrictions imposed by Switzerland and other countries, including parties and third
parties in these disputes, the Panel proposed two further options to the parties .22 The first option
envisaged holding two substantive meetings, whereby the first meeting would be held in a "hybrid"
format, with delegates attending the meeting either virtually or from a designated room at the WTO
premises. The second option envisaged hol ding a single substantive meeting, also in a "hybrid"
format.
1.26. On 9 October 2020, the complainants submitted that both options were consistent with the
DSU, and therefore acceptable to them and open to the Panel. The complainants preferred to proceed
with a single meeting, on the grounds that it would be most efficient for the resolution of the disputes
in light of the long delay already caused by the pandemic , while also preserving the parties' due
process rights.23 India disagreed with both options. India asserted, inter alia, that an oral hearing in
the physical presence of panelists and parties' representatives is a fundamental aspect of a party's
due process rights and an indispensable part of the WTO dispute settlement process, which cannot
be altered without the parties' agreement. India recognized the objective of prompt settlement of
disputes under Article 3.3 of the DSU but contended that this objective should not be used to
interpret the DSU in a way that un dermined India's due process rights. In India's view, the DSU
envisages the conduct of substantive meetings in the physical presence of all parties and "a hearing
through video conferencing is not a substantive meeting as envisaged under the DSU".24 India also
asserted that conducting such a meeting would pose serious technical and logistical difficulti es, as
well as certain coordination limitations between Indian Central and State Government officials, and
its legal representatives. According to India, a "hybrid" meeting would not permit effective
communication between the participants and would impair India's ability to present its case.25
1.27. On 16 October 2020, after careful consideration of the parties' arguments, the Panel decided
to hold two substantive meetings, with the first meeting to be held in a "hybrid" format. The Panel

18 Complainants' comments on the Panel's alternative proposal, 17 April 2020.
19 India's comments on the Panel's alternative proposal, 17 April 2020.
20 Complainants' further comments regarding the Panel's alternative proposal , 23 April 2020; India's
further comments regarding the Panel's alternative proposal, 28 April 2020.
21 A day before the deadline, o n 30 April 2020, the European Union submitted comments on the Panel's
alternative proposal. On 1 May 2020, Canada and the United States also submitted their respective comments.
22 Throughout these proceedings, the Panel closely monitored the evolving sanitary situation, as well as
the restrictions on international travel, and communicated with the parties regarding the impact of such
restrictions on the proceedings. (See e.g. Pa nel's communications to the parties , 14 July 2020; and
7 August 2020 (in response to the complainants' communication, 31 July 2020))
23 Complainants' comments on the Panel's two alternative options, 9 October 2020, p. 2.
24 India's comments on the Panel's two alternative options, 9 October 2020, para. 7.
25 India's comments on the Panel's two alternative options, 9 October 2020, paras. 9-10.
WT/DS579/R • WT/DS580/R • WT/DS581/R

proposed specific dates, and the adoption of draft additional working procedures , for the first
substantive meeting.26
1.28. On 28 October 2020, the complainants agreed with the proposed dates for the first
substantive meeting, as well as the draft additional working procedures , and provided comments
relating to the arrangements of the meeting and the draft additional working procedures . India
maintained its position that it was unable to agree to a "hybrid" procedure and again raised several
concerns relating to India's due process rights and the confidentiality of the procedure. Taking into
account the parties' comments provided on 28 October 2020, in particular India's contention that a
"hybrid" meeting would be "inequitable" 27, due to the nature of the travel restrictions, and in light
of the limitation imposed by Swiss authorities on in-person gatherings (limiting such events to a
maximum of five people), the Panel decided to hold its meeting in a fully virtual format during the
week of 23 November 2020 and adopted Additional Working Procedures for the Panel's First
Substantive Meeting to be Held by Remote Means ("Additional Working Procedures regarding the
Panel's first meeting").28 To ensure that the parties had sufficient opportunity to effectively prepare
and present their cases, the Panel also decided to send advance questions to the parties 10 working
days before the start of the meeting. Moreover, t he Panel decided that it would not pose any
additional questions at the meeting, in order to provide maximum clarity as to the scope of the
discussions at the meeting, but indicated that it might send written questions to the parties and
third parties after the conclusion of the meeting. The Panel conveyed and explained these decisions
to the parties in a communication dated 2 November 2020.29
1.29. On 4 November 2020, India sent a communication to the Panel seeking clarification on two
issues with respect to the confidentiality of the first substantive meeting . In the same
communication, India requested that the Panel reconsider the dates for the first substantive meeting
and postpone it by two more weeks. India based its request for postponement of the meeting on
two grounds: (i) due to India's public holidays, several key officials of its Central and State
Governments (specifically, the State of Uttar Pradesh and the State of Bihar ) involved in these
disputes, would be on leave at the time of the meeting, and (ii) a key member of its delegation was
infected with COVID-19 and would need time to fully recover in order to attend the meeting. In a
communication dated 6 November 2020 , the Panel addressed India's confidentiality queries and
declined the request to postpone the meeting.30
1.30. On 17 November 2020, India once again requested the Panel to postpone the meeting
because a key member of its delegation, who was indispensable for the substantive, as well as
logistical and organizational aspects of the meeting, had contracted the COVID-19 virus and was not
able to participate in the Panel's meeting. On 18 November 2020, the Panel postponed the first
substantive meeting by two more weeks, i.e. to the week of 7 December 2020 . The Panel stated
that the purpose of the postponement was to allow time for India and all other parties and third
parties to make alternative arrangements in case any delegate would be unable to participate at the
meeting due to health reasons.31
1.31. Prior to the first substantive meeting, consistent with paragraph 7 of the Additional Working
Procedures regarding the Panel's first meeting, the parties and third parties conducted individual
test sessions with the WTO Secretariat. Those sessions were aimed at demonstrating the use of the
Cisco Webex platform and detecting any technical issues in advance of the meeting. In addition, on
7 December 2020, the Panel convened a joint test session with all participants from the parties and
third parties. The purpose of the joint test session was to reflect, as far as possible, the conditions
of the meeting. The test sessions were conducted successfully and did not reveal any technical
problems that could affect the conduct of the meeting.

26 See the Panel's communication dated 16 October 2020 in Annex D -1. Following a communication by
India dated 20 October 2020, the Panel, on the same day, extended the deadline for the parties' comments on
the proposed dates, and draft additional working procedures for the first substantive meeting, to
28 October 2020.
27 India's comments regarding the first substantive meeting and additional working procedures,
28 October 2020, paras. 5-9.
28 See the Panel's Additional Working Procedures regarding the Panel's first meeting in Annex A-2.
29 See the Panel's communication dated 2 November 2020 in Annex D-2.
30 See the Panel's communication dated 6 November 2020 in Annex D-3.
31 See the Panel's communication dated 18 November 2020 in Annex D-4.
WT/DS579/R • WT/DS580/R • WT/DS581/R

1.32. On 8 December 2020, as provided for in paragraph 15 of its Working Procedures, the Panel
began its meeting by inviting the complainants to deliver their opening statements. The following
day, the Panel invited India to deliver its opening statement. Thereafter, the parties provided oral
responses to the Panel's advance questions . They also made comments on each other's responses
to the Panel's advance questions. The parties were invited to ask any questions to each other, which
they preferred not to do. The third-party session was held on 10 December 2020 . Canada, China,
the European Union, and Japan made oral statement s at the third-party session. The parties were
invited to ask questions to the third parties , which they preferred not to do. India made certain
comments, through the Panel, on China's oral statement, to which China responded. On the final
day of the meeting, 11 December 2020, the parties presented their closing statements.
1.5.2.2 Second substantive meeting with the parties
1.33. The Panel scheduled its second substantive meeting for the week of 22 March 2021.
1.34. On 12 February 2021, as the public health conditions had not improved since the first
substantive meeting, and in light of the continuing restrictive measures on internationa l travel and
in-person gatherings, the Panel proposed to the parties to hold the second substantive meeting in
the same format as the first substantive meeting (i.e. remotely, via Cisco Webex). The complainants
agreed with the Panel's proposal.32 India continued to object on the same grounds as those raised
in connection with the first substantive meeting and pointed to the possibility of international travel
restrictions being relaxed.33
1.35. On 23 February 2021, having considered the parties' comments and the existing public health
situation, the Panel decided to hold its second substantive meeting in a virtual format and adopted
Additional Working Procedures for the Panel's Second Substantive Meeting to be Held by Remote
Means.34 The Panel also decided to send advance questions to the parties 10 working days before
the meeting. Moreover, the Panel decided not to ask any additional questions at the meeting but
indicated that it might send written questions to the parties after the conclusion of the meeting. In
reaching its decision s regarding the format and conduct of the second substantive meeting, the
Panel was guided by the same considerations as for the first substantive meeting.
1.36. Similar to the first substantive meeting, in addition to the individual test sessions conducted
by the WTO Secretariat with each party, the Panel held a joint test session with all participants on
22 March 2021 . The test sessions were conducted successfully and did not reveal any technical
problems that could affect the conduct of the meeting. On 23 March 2021, the parties delivered their
opening statements. The complainants presented their statements, followed by India.35 Guatemala
provided comments on India's opening statement to which India responded. On 24 March 2021, the
parties provided their oral responses to the Panel's advance questions. On the final day of the
meeting, 25 March 2021, the parties completed their oral responses to the advance questions. The
parties also made comments on certain of the parties' respective responses to the Panel's advance
questions. Finally, the parties delivered their closing statements.
1.5.3 Preliminary ruling
1.37. In its first written submission, India asked the Panel to issue a preliminary ruling finding that
certain measures challenged by the complainants fell outside the Panel's terms of reference because
they expired before, or were enacted after, the date of the Panel's establishment.36
1.38. On 1 April 2020, the complainants responded to India's request for a preliminary ruling. On
8 April 2020, the United States submitted its third-party comments on India's request for a
preliminary ruling. El Salvador and the European Union included their third-party comments in their
written submissions, which were submitted on 9 April 2020.

32 Complainants' comments on the Panel's proposal for the second substantive meeting,
19 February 2021.
33 India's comments on the Panel's proposal for the second substantive meeting, 19 February 2021.
34 See the Panel's Additional Working Procedures regarding the Panel's second meeting in Annex A-3.
35 India did not avail itself of the right provided under paragraph 16 of the Panel's Working Procedures to
deliver its opening statement first at the second substantive meeting of the Panel.
36 India's first written submission, para. 32.
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1.39. On 13 April 2020, India sought an opportunity from the Panel to comment on the
complainants' and third parties' comments concerning its request for a preliminary ruling .
On 17 April 2020, the complainants indicated, at the Panel's invitation, that if the Panel grant ed
India's request, it should also give the complainants a further opportunity to comment on India's
comments. On 20 April 2020, the Panel granted all parties and third parties a final opportunity to
comment on India's request for a preliminary ruling.
1.40. On 27 April 2020, India submitted comments on the complainants ' and third parties'
comments concerning its reque st for a preliminary ruling . On 4 May 2020, the complainants
submitted their further comments . On 8 May 2020, Costa Rica submitted comments on India's
request. On 11 May 2020, El Salvador provided further comments on India's request.37
1.41. On 9 November 2020, the Panel issued to the parties and third parties the first part of its
preliminary ruling regarding the allegedly expired measures , including the Panel's reasoning . The
Panel found that the elements which India had identified as "measures" that had expired, were in
fact part of the legal instruments that, in the complainants' view, implemented the challenged
measures. Therefore, the Panel rejected India's request to find that the identified "measures" fell
outside its terms of reference. The Panel decided to examine the relevance and probative value of
these legal instruments as part of its substantive assessment of the complainants' claims.
1.42. On 14 December 2020, the Panel issued to the parties its finding with respect to the second
part of India's request for a preliminary ruling, regarding 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 tran sport and freight charges on export of sugar"
(the Marketing and Transportation Scheme), which was enacted after the Panel's establishment. The
Panel rejected India's request and found that the Marketing and Transportation Scheme fell within
its terms of reference. The Panel informed the parties that the reasoning for this finding would be
included in the Interim Report.
1.43. The first and second parts of the Panel's preliminary ruling are set out in Annexes E-1 and
E-2, respectively.
2 FACTUAL ASPECTS
2.1 The measures at issue
2.1. The claims brought by the complainants concern India's alleged domestic support to sugarcane
producers and export subsidies pertaining to sugar or sugarcane.
2.1.1 India's alleged domestic support to sugarcane producers
2.2. The complainants argue that India maintains mandatory minimum prices for sugarcane, as well
as other payments and policies in favour of sugarcane producers.
2.3. Regarding the mandatory minimum prices for sugarcane, the complainants submit that India
provides domestic support, in the form of market price support, to sugarcane producers through the
following measures, which are implemented through a number of legal instruments:
i. The "Fair and Remunerative Price" (FRP), maintained by the Indian Central
Government, which requires Indian purchasers of sugarcane to pay a mandatory
minimum price to the sugarcane producers. The FRP is allegedly determined by the
Central Government annually, based on the recommendations of the Commission for
Agricultural Costs and Prices (CACP)38;
ii. A number of "State-Advised Prices" (SAPs), maintained by certain Indian State
Governments39, which require purchasers of sugarcane to pay a mandatory minimum

37 El Salvador submitted its comments after the deadline set by the Panel.
38 Brazil's first written submission, paras. 25-34 and 134-155; Australia's first written submission,
paras. 23-39 and 166-173; Guatemala's first written submission, paras. 37-50 and 137-165.
39 The complainants challenge the SAPs maintained by six States, namely Bihar, Haryana, Punjab, Tamil
Nadu, Uttar Pradesh, and Uttarakhand.
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price to the sugarcane producers of the specific state. The SAPs are allegedly
determined by the State Governments on an annual basis and are higher than the FRP.
According to the complainants, w here an SAP is applied, purchasers are required to
pay the SAP instead of the FRP40; and
iii. A number of policies and payments provide d by the Central Indian Government and
certain State Governments that allegedly operate to assist sugarcane purchasers in
paying the mandatory minimum price for sugarcane.41
2.4. In addition to market price support, the complainants submit that India provid es domestic
support to sugarcane producers in the form of non-exempt direct payments and other policies.
Specifically, the complainants refer to42:
i. Tamil Nadu's transitional production incentives in favour of sugarcane producer s, for
which the Tamil Nadu State Government budgeted certain amounts under the entry
"Production Incentive to Sugarcane Farmers" for the sugar seasons 2017 -18 and
2018-1943;
ii. Andhra Pradesh's purchase tax remittances in favour of sugarcane producers, for which
the Andhra Pradesh State Government budgeted certain amounts under the entry
"Assistance to Co-operative Sugar Factories towards reimbursement of Purchase Tax
incentives" for the sugar seasons 2014-15 and 2015-1644; and
iii. Karnataka's incentive price payments in favour of sugarcane producers, for which the
Karnataka State Government budgeted certain amounts under the entry "Payment of
Incentive Price for Sugar Cane through Sugar Factories. Subsidies" for the sugar
season 2017-18.45

40 Brazil's first written submission, paras. 35 -48 and 156 -160; Australia's first written submission,
paras. 41-61 and 174-180; Guatemala's first written submission, paras. 51-72 and 137-165.
41 Brazil's first written submission, paras. 161 -162 and Appendix A; Australia's first written submission,
paras. 181-185 and Annexes A, B, C, D -2, D-3 and E; Guatemala's first written submission, paras. 87 -96 and
166-168. The complainants submit that these policies and payments constitute measures through which India
provides domestic support to sugarcane producers . (Brazil also submits that these "support programs …
constitute either non-exempt direct payments or other non-exempt policies". (Brazil's response to Panel question
No. 21, para. 21) ) Nonetheless, the complainants do not include them in their calculations of India's alleged
market price support, because, in their view, they either constitute (in the view of Australia and Guatemala), or
"may" constitute (in the view of Brazil), "measures made to maintain the price gap" within the meaning of the
second sentence of paragraph 8 of Annex 3 to the Agreement on Agriculture . Australia is the only complainant
that requests the Panel to explicitly identify them as "measures through which India is providing market price
support above de minimis". (See Australia's first written submission, para. 186)
42 Brazil also considers that the alleged support programs listed under paragraph 2.3(iii) above
constitute non-exempt direct payments or other non-exempt policies. However, Brazil does not include them
in its calculation of India's AMS. (See Brazil's response to Panel question No. 21)
43 Brazil's first written submission, para. 163 and A ppendix B-2; Australia's first written submission,
paras. 198-203 and Annex E -8; Guatemala's first written submission, paras. 81 -86 and 176 -179. See also
complainants' responses to Panel question No. 73.
44 Brazil's first written submission, para. 163 and Appendix B-1; Australia's first written submission,
paras. 190-194 and Annex E -1; Guatemala's first written submission, paras. 97 -99 and 180 -184. See also
complainants' responses to Panel question Nos. 28, 50 and 74. In the context of our preliminary ruling, found in
Annex E-1 to this Report , the word "remission" is used in referring to this measure allegedly ma intained by
Andhra Pradesh and similar measures maintained by certain other States in India.
45 Brazil's first written submission, para. 163 and A ppendix B -3; Australia's first written submission,
paras. 195-197 and Annex E -5. See also complainants' respons es to Panel question Nos. 27, 75 -78. While
Guatemala initially included Karnataka's alleged "incentive price payments" in its calculation of India's domestic
support to sugarcane producers, it subsequently withdrew its assertions, and omitted the respectiv e amounts
from its calculation. (Guatemala's comments on India's response to Guatemala's question No. 3)
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2.1.2 India's alleged export subsidies
2.5. The complainants identify the measures at issue as federal-level measures pertaining to sugar
or sugarcane that provide subsidies contingent upon export performance, which are implemented
through a number of legal instruments.46
2.6. The complainants challenge, as allegedly WTO-inconsistent subsidies contingent upon export
performance, three schemes that operate in conjunction with Minimum Indicative Export Quotas
(MIEQs) or Maximum Admissible Export Quantity (MAEQ). The MIEQ and MAEQ orders allocate sugar
export quotas to sugar mills on a per -mill basis. They are adopted for each sugar season by the
Department of Food and Public Distribution (DFPD), a Central Government agency that is part of the
Indian Ministry of Consumer Affairs, Food and Public Distribution.
2.7. Specifically, all complainants take issue with the following assistance schemes introduced by
India:
a. Production Assistance Scheme, which operates in conjunction with the MIEQ47,
implemented, inter alia, through:
i. The "Scheme for extending production subsidy to sugar mills" for the sugar season
2015-16;
ii. The "Scheme for Assistance to Sugar Mills" for the sugar season 2017-18; and
iii. The "Scheme for Assistance to Sugar Mills" for the sugar season 2018-19.
b. Buffer Stock Scheme, which operates in conjunction with the MIEQ48, implemented, inter
alia, through:
i. The "Scheme for Creation and Maintenance of Buffer Stock of 30 Lakh MT", introduced
in 2018 ("Buffer Stock Scheme 2018"); and
ii. The "Scheme for Creation and Maintenance of Buffer Stock of 40 Lakh MT", introduced
in 2019 ("Buffer Stock Scheme 2019").
c. Marketing and Transportation Scheme, which operates in conjunction with the MAEQ.49
2.8. In addition, Australia takes issue with the Duty Free Imports Authorisation (DFIA) Scheme.50

46 Brazil's panel request, para. 14; Australia's panel request, para. 19, and para. 9 of Annex A thereto;
Guatemala's panel request, para. 9, and para. 9 of the Annex thereto. A detailed description of the measures at
issue, and the complainants' requests fo r findings with respect to export subsidies, is set forth in section 7 of
this Report.
47 Brazil's first written submission, paras. 200 -204, 214 -222 and response to Panel question No. 79;
Australia's first written submission, para. 2 30 and Annex A; Guatemal a's first written submission,
paras. 208-219.
48 Brazil's first written submission, paras. 205-213 and response to Panel question No. 79; Australia's first
written submission, paras. 231 -233 and Annex C; Guatemala's first written submission, paras. 220 -233 and
response to Panel question No. 80.
49 Brazil's first written submission, paras. 223 -229; Australia's first written submission, para. 234 and
Annex D-3; Guatemala's first written submission, paras. 234-241.
50 Australia's first written submission, para. 235 and Annex F.
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3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 Brazil
3.1. Brazil requests that the Panel find that India provides domestic support to sugarcane producers
that exceeds the de minimis level of 10% of the total value of sugarcane production, and therefore
acts inconsistently with its obligations under Article 7.2(b) of the Agreement on Agriculture.51
3.2. Brazil also requests that the Panel find that India provides export subsidies, within the meaning
of Article 9.1(a) of the Agreement on Agriculture , in a manner inconsistent with Article 3.3 and
Article 8 of the Agreement on Agriculture.52
3.3. Brazil thus requests, pursuant to Article 19.1 of the DSU, that the Panel recommend that India
bring its measures into conformity with its obligations under the Agreement on Agriculture.53
3.2 Australia
3.4. Australia requests that the Panel find that India provides domestic support to sugarcane
producers that exceeds the de minimis level of 10% of the total value of sugarcane production,
contrary to India's obligations under Article 7.2(b) of the Agreement on Agriculture.54
3.5. Australia further requests that the Panel find that India's Production Assistance and Buffer
Stock Schemes, operating in conjunction with the MIEQ orders, the Marketing and Transportation
Scheme, operating in conjunction with the MAEQ, and the DFIA Scheme: (i) constitute export
subsidies within the meaning of Article 9.1(a) of the Agreement on Agriculture, and are therefore
inconsistent with India's obligations under Articles 3.3 and 8 of the Agreement on Agriculture, or, in
the alternative , with Articles 8 and 10.1 of the Agreement on Agriculture ; and (ii) constitute
prohibited export subsidies that are inconsistent with India 's obligations under Articles 3.1(a) and
3.2 of the SCM Agreement.55
3.6. Australia also requests that the Panel find that, by failing to notify any of its annual domestic
support for sugarcane and sugar subsequent to 1995 –96, and its export subsidies since 2009–10,
India has acted inconsistently with its obligations under Articles 18.2 and 18.3 of the Agreement on
Agriculture and Article 25 of the SCM Agreement, or, in the alternative, Article XVI:1 of the
GATT 1994.56
3.7. Australia thus requests, pursuant to Article 19.1 of the DSU, that the Panel recommend that
India bring its measures into conformity with its obligations under the Agreement on Agriculture ,
the SCM Agreement, or the GATT 1994 , as reflected above . With respect to the export subsidies
prohibited under Article 3.1(a) of the SCM Agreement, Australia further requests that the Panel,

51 Brazil's second written submission, para. 151. In its first written submission, in addition to the claim
under Article 7.2(b), Brazil raised an alternative claim under Articles 3.2 and 6.3 of the Agreement on Agriculture.
(Brazil's first written submission, para. 232 ) In its second written submission, Brazil stated that the Panel need
not address Brazil's alternative claim because "India agrees that its Schedule contains no Total AMS
commitment". (Brazil's second written submission, fn 22 to para. 9 (referring to India 's response to Panel
question No. 46), and fn 25 to para. 10 (referring to Brazil and India's responses to Panel question No. 15(b)))
52 Brazil's first written submission, para. 233. According to Brazil, the following schemes constitute
prohibited export subsidies: (i) Scheme for assistance to sugar mills for the 2018-19 sugar season; (ii) Scheme
for creation and maintenance of buffer stock in 2018; (iii) Scheme for creation and maintenance of buffer stock
in 2019; (iv) Scheme for assistance to sugar mills for the 2017 -18 sugar season; (v) Scheme for extending
production subsidy to sugar mills for the 2015 -16 sugar season; and (vi) the Marketing and Transportation
Scheme. (Brazil's second written submission, paras. 82-83; response to Panel question No. 79)
53 Brazil's first written submission, para. 234.
54 Australia's second written submission, para. 235. In its first written submission, in addition to the claim
under Article 7.2(b), Australia raised an alternati ve claim under Articles 3.2 and 6.3 of the Agreement on
Agriculture. (Australia's first written submission, para. 468. See also Australia's response to Panel question
No. 15) At the first substantive meeting, Australia asserted that, since India agreed that it has no Total AMS
commitment in its Schedule, there is "no dispute amongst the parties that India is bound by Article 7.2(b) of the
Agreement on Agriculture and must not provide support to agricultural producers in excess of India's de minimis
level". (Australia's closing statement at the first substantive meeting of the Panel, para. 11) Thereafter, Australia
did not include the alternative claims under Articles 3.2 and 6.3 in its list of findings requested from the Panel.
55 Australia's first written submission, para. 468.
56 Australia's first written submission, para. 468.
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consistent with Article 4.7 of the SCM Agreement, recommend that India withdraw them without
delay within a time-period specified by the Panel.57
3.3 Guatemala
3.8. Guatemala requests that the Panel find that India acts inconsistently with Article 7.2(b) of the
Agreement on Agriculture by providing domestic support that exceeds the de minimis level of 10%
of the total value of sugarcane production.58
3.9. Guatemala further requests that the Panel find that India's subsidies under the Production
Assistance and Buffer Stock Schemes, which operate in conjunction with the MIEQs, and under the
Marketing and Transportation Scheme, which operates in conjunction with the MAEQ: (i) constitute
export subsidies under Articles 9.1(a) and 9.1(c) of the Agreement on Agriculture, for which India
did not undertake reduction commitments, and thus violate India's obligations under Articles 3.3, 8,
and 9.1 of the Agreement on Agriculture; and (ii) constitute prohibited export subsidies within the
meaning of Article 3.1(a) of the SCM Agreement.59
3.10. Guatemala thus requests, pursuant to Article 19.1 of the DSU, that the Panel recommend that
India bring its measures into conformity with its obligations under the Agreement on Agriculture and
the SCM Agreement. With respect to the measures that constitute prohibited export subsidies under
Article 3.1(a) of the SCM Agreement, Guatemala requests that the Panel, in accordance with
Article 4.7 of the SCM Agreement, recommend that India withdraw those measures without delay
within a time-period specified by the Panel.60
3.4 India
3.11. India requests that the Panel find that:
i. the complainants have failed to meet their burden of showing that India provides
market price support for sugarcane that exceeds the de minimis level of 10% of the
total value of sugarcane production as per Article 7.2(b) of the Agreement on
Agriculture61;
ii. the complainants have failed to meet their burden of showing that India's Production
Assistance Scheme, Buffer Stock Scheme, the Marketing and Transportation Scheme,
and the DFIA constitute subsidies within the meaning of Article 9 of the Agreement on
Agriculture and, consequently, that the complainants have failed to demonstrate that
India has acted inconsistently with its obligations under Articles 3.3, 8, and 10 of the
Agreement on Agriculture;

57 Australia's first written submission, para. 469.
58 In its first written submission, Guatemala req uested that the Panel find that India acts inconsistently
with Articles 7.2(b), 3.2, and 6.3 of the Agreement on Agriculture. (Guatemala's first written submission,
para. 324. See also Guatemala's response to Panel question No. 15) Following India's acknowledgement that its
Schedule does not contain Total AMS reduction commitments (India's response to Panel question No. 46),
Guatemala, in its second written submission, requested that the Panel find that India acts inconsistently with
Article 7.2(b) of the A greement on Agriculture, or, in the alternative, if the Panel were to find that India has
scheduled commitments of "zero" or "nil" for sugarcane, that India violates its obligations under Articles 3.2 and
6.3 of the Agreement on Agriculture. (Guatemala's second written submission, para. 132)
59 Guatemala's first written submission, para. 324.
60 Guatemala's first written submission, para. 325.
61 In its first written submission, India asserted that the complainants have failed to demonstrate that
India has acted inconsistently with its obligations under Articles 3.2 and 6.3 and/or Article 7.2 of the Agreement
on Agriculture. (India's first written submission, para. 51) In response to a Panel question, India submitted that
it does not have a Total AMS commitment in Part IV of its Schedule, such that Articles 3.2 and 6.3 do not apply.
(India's response to Panel question No. 46. See also India's response to Panel question 15(a)) India also asserted
that a finding under Articles 3.2 and 6.3 of the Agreement on Agriculture is not necessary if the Panel concludes
that India has acted inconsistently with Article 7.2(b) of that Agreement . (India's response to Panel question
No. 15(b))
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iii. the Marketing and Transportation Scheme falls within the sc ope of Articles 9.1(d)
and (e) of the Agreement on Agriculture and is, therefore, permitted under Article 9.4
of that Agreement;
iv. the requirements of Article 3 of the SCM Agreement are not yet applicable to India and
that India has a phase -out period of 8 y ears to eliminate export subsidies, if any,
pursuant to Article 27 of the SCM Agreement;
v. notwithstanding the above, the complainants have failed to demonstrate that India's
Production Assistance Scheme, Buffer Stock Scheme, the Marketing and
Transportation Scheme, and the DFIA constitute prohibited export subsidies that are
inconsistent with India's obligations under Articles 3.1(a) and 3.2 of the
SCM Agreement; and
vi. the DFIA falls within the scope of footnote 1, read with Annex I, of the SCM Agreement,
and thus it is not a "subsidy" within the meaning of the SCM Agreement and the
Agreement on Agriculture.62
3.12. In addition, as noted in section 1.5.3 above, India, in its first written submission, requested
the Panel to issue a preliminary ruling finding that certain measures challenged by the complainants
do not fall within the Panel's terms of reference as per Articles 6.2 and 7.1 of the DSU.63
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their integrated executive summaries, provided
to the Panel in accordance with paragraph 23 of the Working Procedures adopted on
5 December 2019 (see Annexes B-1, B-2, B-3, and B-4).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Canada, China, Costa Rica, El Salvador, the European Union, Japan, and the
United States are reflected in their executive summaries, provided to the Panel in accordance with
paragraph 26 of the Working Procedures adopted on 5 December 2019 (see Annexes C-1, C-2, C-3,
C-4, C-5, C-6, and C-7). The other third parties did not submit written or oral arguments to the
Panel.
6 INTERIM REVIEW
6.1 Introduction
6.1. On 22 July 2021, the Panel issued its Interim Report to the parties. On 12 August 2021, Brazil,
Australia, Guatemala, and India each submitted written re quests for the Panel to review precise
aspects of the Interim Report. On 26 August 2021, Australia, Guatemala, and India submitted
comments on the other parties' requests for review.
6.2. In addition to its request for review, on 12 August 2021, India also req uested that the Panel
hold an interim review meeting with the parties to discuss two precise aspects of the Interim Report,
namely the Panel's reference to the Duty Free Import Authorization (DFIA) Scheme64 and the Panel's
recommendation under Article 4.7 of the SCM Agreement.65
6.3. On 18 August 2021, the complainants indicated, inter alia, that the interim review meeting had
to be confined to the two precise aspects identified by India. On 20 August 2021, India also indicated
that the scope of the interim rev iew meeting would be confined to the two precise aspects of the
Interim Report identified in its request for review. Moreover, in India's view, since these two precise
aspects did not concern the claims raised by Brazil (DS579), participation in the meeting had to be
limited to the parties in the other two disputes (DS580 and DS581) , the Panel, and the WTO

62 India's first written submission, para. 161.
63 India's first written submission, para. 162.
64 See section 7.2.2.5 below.
65 See section 7.2.6 below.
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Secretariat. On 24 August 2021, Brazil stated that it did not object to the interim review meeting
proceeding without its participation, provided that the meeting was limited to the two issues raised
in India's request for review of precise aspects of the Interim Report dated 12 August 2021. Brazil
also stated that it would not submit any comments on India's request for review. Australia and
Guatemala did not provide any comments on India's view in this regard. In accordance with
Article 15.2 of the DSU , the Panel held an interim review meeting with the parties in DS580 and
DS581 (i.e. Australia, Guatemala, and India) on 2 September 2021 , in a virtual format, via Cisco
Webex.
6.4. In accordance with Article 15.3 of the DSU, this section of the Report sets out our response to
the parties' requests made at the interim review stage. In addition to the requests discussed below,
we made corrections to a number of typographical and other non-substantive errors in the Report,
including those identified by the parties. The numbering of some of the footnotes in the Final Report
has changed from the numbering in the Interim Report. The discussion in this section refers to the
numbering in the Final Report and, where it differs, includes the corresponding numbering in the
Interim Report.
6.5. Brazil, Australia, and Guatemala made requests to amend or add a number of footnotes
containing references to the parties' statements and submissions. A number of these requests have
been implemented, resulting in modifications to, or additional references in, footnotes to paragraphs
7.1, 7.2, 7.11, 7.28, 7.46, 7.78, 7.126, 7.131, 7.147, 7.149, 7.151, 7.158, 7.180, 7.181, 7.182,
7.184, 7.201, 7.210, 7.225, 7.227, 7.233, 7.235, 7.237, 7.239, 7.247, 7.257, 7.260, 7.266, 7.272,
7.286, 7.288, 7.296, 7.298, 7.343, and 7.346.
6.2 Requests for review of sections 1 to 3 (Introduction, Factual aspects, and Parties '
requests for findings and recommendations)
6.6. Guatemala suggest ed adding, in paragraphs 1.31 and 1.36, an explanation that the test
sessions for the first and second substantive meetings were conducted successfully without any
indication of technical problems. We have implemented this suggestion.
6.7. To reflect more accurately what is being described in paragraph 2.3, Guatemala suggest ed
replacing "legal instruments" at the end of the first line with "measures". We have implemented
this suggestion and made an additional modification in line with our preliminary ruling, set out in
Annex E-1 to this Report.
6.8. Guatemala suggested adding a brief explanation in footnote 41 to paragraph 2.3 in order to
explain why the complainants did not include certain measures in their calculations of India's alleged
market price support. We have added and, for the sake of accuracy, expanded the suggested change.
6.9. Brazil requested adding a sentence in footnote 41 to paragraph 2.3 to reflect its view that the
policies and payments listed in paragraph 2.3(iii) constitute "non-exempt direct payments" or "other
non-exempt policies". We have implemented this request and made minor stylistic changes.
6.10. Brazil also requested adding a new footnote reflecting its view that the policies and payments
listed under paragraph 2.3(iii) constitute "non -exempt direct payments" or "other non -exempt
policies". We have accepted Brazil's request and added footnote 42 to paragraph 2.4.
6.11. Guatemala requested that footnote 58 (footnote 57 of the Interim Report) to paragraph 3.8
be reformulated in order to explain that Guatemala limited its request for findings to Article 7.2(b)
of the Agreement on Agriculture because India acknowledged that its Schedule contains no Total
AMS commitments, as well as to chronologically present the references to Guatemala's submissions.
We have reformulated the footnote as requested.
6.3 Requests for review of section 7.1 (Domestic support)
6.12. Regarding paragraph 7.1, Guatemala request ed adding a footnote indicating that India
acknowledged that it has no Total AMS commitments in its Schedule. Regarding paragraph 7.2,
Guatemala propose d adding a sentence explaining why India considers that the complainants'
interpretation of market price support is incorrect. We have added certain language to paragraph 7.2
in order to implement these requests by Guatemala.
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6.13. With respect to footnote 123 (footnote 93 of the Interim Report) to paragraph 7.19, and
paragraph 7.29, Guatemala requested the inclusion of an explanation as to why the complainants
omitted certain measures from their calculations of India's alleged market price support. To
implement these requests, we have included additional language and cross-references to where this
explanation is contained elsewhere in the Report.
6.14. With respect to paragraph 7.20, Brazil and Australia requested that the description of India's
arguments replicate the wording used by India. Australia requested a similar change to
paragraph 7.59. We have modified the language used in these paragraphs.
6.15. Regarding paragraph 7.37, Brazil and Australia requested revising the Panel's description of
the complainants' understanding of when market price support can be said to exist. Guatemala also
requested amending paragraph 7.37 to reflect the argument, which Guatemala ascribes to the
complainants, that the applied administered price may be achieved in different ways, one of which
consists of a price set by the government at which specified entities will purchase a given agricultural
product. India objected to Guatemala's request because, in India's view, this paragraph accurately
conveys Guatemala's arguments regarding the applied administered price. Finally, Guatemala also
requested ascribing the argument concerning Article 6.1 of the Agreement on Agriculture to all three
complainants and not just Brazil and Australia. Regarding the existence of market price support, we
have revised the description of the comp lainants' arguments and, for the sake of clarity, included
direct quotations from their submissions and statements in footnote 147 (footnote 117 of the Interim
Report) to paragraph 7.37. Regarding the applied administered price, we note that Guatemala does
not indicate any references to the complainants' submissions or statements that would support the
assertion that Guatemala wishes to ascribe to the complainants. We therefore decline that request.
Regarding Article 6.1 of the Agreement on Agriculture, we have ascribed this argument to all three
complainants.
6.16. Regarding paragraph 7.42, Brazil requested that the Panel's description of the logic of the
Agreement on Agriculture be harmonized with the description in paragraph 7.26. We have revised
paragraph 7.42 to implement this request.
6.17. Concerning paragraph 7.44, Australia requested that the reference to the complainants, in
the context of describing three possible interpretations of paragraph 1 of Annex 3, be revised to
Guatemala. In light of Australia's request, we have modified the relevant sentence of
paragraph 7.44.
6.18. With respect to footnote 176 (footnote 144 of the Interim Report) to paragraph 7.46, Australia
requested ascribing to all three complainants, instead of just Brazil and Guatemala, an argument
opposing India's view that all subsidies must share a commonality with the types of subsidies set
out in paragraph 2 of Annex 3 of the Agreement on Agriculture. In our view, the reference provided
by Australia in its request (to paragraph 66 of its second written submission) is not sufficient to
ascribe the argument to Australia. Nevertheless, we have included a quotation from that paragraph
in footnote 176 for the sake of completeness.
6.19. Regarding paragraph 7.48, Brazil and Australia request ed removing the word "probably" in
reference to the intentions of the drafters of the Agreement on Agriculture, in order to harmonize
with a corollary reference in paragraph 7.57. While we agree that the description in these two
paragraphs should be harmonious, our use of the word "probably" in paragraph 7.48 is deliberate.
We have therefore added the word "probably" to paragraph 7.57.
6.20. Concerning paragraph 7.53, Guatemala suggest ed simplifying the Panel's reasoning by
deleting certain language. We consider that Guatemala's proposed revision would no t only simplify
but modify the substance of our reasoning and therefore decline this request.
6.21. Brazil requested either the deletion or revision of paragraph 7.55 in order to avoid giving the
impression that a methodology based on budgetary outlays is hierarchically superior to other
methodologies for the purpose of quantifying non -exempt direct payments or other non -exempt
measures. We agree with Brazil that this paragraph could benefit from further clarity and have
revised it accordingly.
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6.22. Brazil requested that, in paragraph 7.60, the Panel avoid inadvertently characterizing the
interpretative relevance of Members' Schedules. For the sake of clarity, we have revised the last
sentence of paragraph 7.60.
6.23. With respect to paragraph 7.69, Guatemala suggested modifying the Panel's description of
the second sentence of paragraph 8 of Annex 3, for the sake of completeness and clarity. We have
modified the relevant language of paragraph 7.69.
6.24. Brazil requested that the heading of section 7.1.3.2.3 be revised to reflect that this section
addresses both the existence and the amount of India's market price support. We have modified the
heading of that section.
6.25. Brazil requested replacing the words "have, in principle, to be taken" with "must be taken" in
the fourth sentence of paragraph 7.78. We have modified the paragraph accordingly.
6.26. Brazil requested that the definition of the term "direct" as provided in paragraph 7.225, in the
context of our analysis of Article 9.1(a) of the Agreement on Agriculture, be added to the definition
of the same term provided in paragraph 7.88, in the context of our analysis of paragraph 1 of
Annex 3 to that Agreement.66 India requested that we reject Brazil's request because we need not
reconcile the two definitions to resolve these disputes. We agree with India and therefore decline
Brazil's request. We have, however, added the words " inter alia" before the definition s et out in
paragraph 7.88 to indicate that there may be more than one definition of the term "direct" than the
one provided therein.
6.27. Brazil requested modifying paragraphs 7.96 and 7.104 to clarify that our findings in the
relevant sections apply "in the circumstances of this case" and "in light of the schemes at issue" .
Doing so, in Brazil's view, would avoid any suggestion that we consider evidence of actual
disbursement, drawn from an annual budget docume nt, to be necessary in all circumstances to
establish the existence and amount of domestic support provided by non -exempt direct payments
and other non -exempt policies. To accommodate Brazil's request, we have modified the last
sentences of both paragraphs.
6.28. Regarding paragraph 7.111, Guatemala suggested, for the sake of clarity, illustrating the level
of India's actual AMS in relation to India's total v alue of sugarcane by including a comparison in
relative terms (in addition to the existing comparison in absolute terms). India did not consider that
this comparison was necessary for the purposes of resolving these disputes. We agree with India
and therefore decline Guatemala's request in this respect.
6.4 Requests for review of section 7.2 (Export subsidies)
6.29. In addition to the changes listed in paragraph 6.5 above, the complainants requested that
minor changes be made in footnotes 328 and 329 (footnotes 295 and 296 in the Interim Report) to
paragraph 7.124; paragraphs 7.126, 7.143, 7.146, 7.165, 7.171, 7.173, 7.196, 7.202, 7.266, 7.288,
and 7.289; and the title of section 7.2.5.4. We have made the requested changes.
6.30. Australia requested that, for the sake of consistency with Australia's written submissions, the
Panel clarify, in paragraph 7.116, that Australia makes an alternative claim under Article 10.1 of the
Agreement on Agriculture. We have made the requested modification.
6.31. Australia and Brazil request ed that the Panel modify it s descriptions of the MAEQ in
paragraphs 7.124, 7.192, 7.275 and footnote 307 (footnote 274 of the Interim Report) to
paragraph 7.115 to indicate that the MIEQs and the MAEQ "each determine a total annual amount
of sugar export quotas". In Australia's and Brazil's view, this would ensure that the Report does not
minimize the similarities between the MIEQs and the MAEQ. India considers that the changes
requested by Brazil and Australia are not required because the MIEQ is the minimum quantity of
sugar allocated to sugar mills for export, while the MAEQ is the maximum quantity allocated to sugar
mills for export. We do not consider the change requested by Australia and Brazil to be necessary.
Section 7.2.2 of the Report seeks to describe the measures at issue based on the text of the legal
instruments, which implement them. In p aragraph 7.275 of the Report, we explain that, although,

66 Brazil made a similar request regarding paragraph 7.225. See para. 6.41 below.
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on its face, the MAEQ order imposes "the maximum admissible export quantity of sugar", to be
eligible for assistance, a sugar mill is required to have fulfilled at least 50% of its export target.
Therefore, eligibility for a subsidy under the Marketing and Transportation Scheme is contingent on
export performance within the meaning of Article 9.1(a) of the Agreement on Agriculture. We
consider this explanation sufficient to address the Australia's and Brazil's concerns.
6.32. Brazil requested that the Panel add a footnote to the phrase "pursuant to Article 21.1" in the
second sentence of paragraph 7.154, to reflect that Article 3.1 of the SCM Agreement applies "except
as provided in the Agreement on Agriculture". We have accepted Brazil's request and added
footnote 389 to paragraph 7.154.
6.33. To better reflect Australia's position, Australia requested that the Panel indicate, in
paragraph 7.180, that Australia "does not consider the characterisation of Article 9.4 determinative
of which party bears the initial burden of raising the provision". Australia also request ed that the
Panel add additional references to footnote 418 (footnote 384 in the Interim Report). We have made
the requested changes.
6.34. The complainants requested that paragraph 7.181 be reformulated to avoid confusion as to
the respective positions of the complainants and India. We have implemented this suggestion. Brazil
also requested that we add references to India's su bmissions in footnote 421 (footnote 387 of the
Interim Report) to paragraph 7.181. We have implemented Brazil's request.
6.35. Brazil requested that we expand the summary of Brazil's arguments regarding the legal
standard under Articles 9.1(d) and (e) of the Agreement on Agriculture in paragraph 7.186. We have
partially accepted Brazil's request by adding the summary of its arguments in footnotes 431 and
432 (footnotes 397 and 398 of the Interim Report).
6.36. Brazil requested that the content of footnote 412 to paragraph 7.192 of the Interim Report
be moved into the body of paragraph 7.192. We have implemented Brazil's request.
6.37. Guatemala requested that we clarify, in paragraph 7.202, that the relevant payments under
the Marketing and Transportation Scheme are made to sugarcane farmers. We have made the
requested change.
6.38. Brazil requested that the Panel consider tying its reasoning in paragraph 7.204 to the
interpretation set out in paragraph 7.191 of the Interim Report. We have accepted Brazil's request
and added footnote 461 to paragraph 7.204, which cross -refers to the reasoning set out in
paragraph 7.191.
6.39. Guatemala requested that we add to paragraph 7.210 references to the evidence submitted
by the complainants to demonstrate that, because sugar mills are located in different parts of India
and export sugar on different delivery terms, they incur different amounts of transportation costs.
We have accepted G uatemala's request and added references to the relevant evidence in
footnotes 467 and 469 to paragraph 7.210. Guatemala also requested that we specify that, when
exports occur on an EXW bas is, the seller incurs neither internal no r international transport costs.
We have made the modification requested by Guatemala.
6.40. Guatemala requested that the Panel add a footnote to paragraph 7.217 to reflect that the
DFIA Scheme is challenged only by Australia. We have made the requested clarification in
footnote 479 to paragraph 7.217.
6.41. Should the Panel accept Brazil's request regarding paragraph 7.88, Brazil requested that the
Panel revise the second sentence of paragraph 7.225 and add the phrase "without intervening factors
or intermediaries" to the definition of "straightforward, uninterrupted, immediate". To reflect this
change in the application of that interpretation in the context of the export subsidy analysis, Brazil
further requested that the Panel revise the third sentence of paragraph 7.225 and make a similar
change to paragraph 7.266. As noted in paragraph 6.26 above, we do not consider it necessary to
revise paragraph 7.88. We therefore also decli ne Brazil's request to modify paragraphs 7.225 and
7.226.
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6.42. Guatemala requested that a footnote to the complainants' response to Panel question No. 9
be added to paragraph 7.237. For its part, Brazil requested that the last sentence of paragraph 7.237
be modified to reflect that the purpose for which the assistance is provided to sugar mills is to
alleviate the mills from financial obligations to the farmers. We have made the requested changes
to the text of paragraph 7.237 and added a reference t o the complainants' arguments in
footnote 519.
6.43. Brazil requested that the Panel delete the words "potentially" and "however" from
footnote 528 (footnote 489 in the Interim Report) to paragraph 7.240. Brazil considers that, in this
footnote, the Panel made additional findings regarding the characterization of the recipients under
Article 9.1(a), with which Brazil agrees. Brazil also note s that India did not disagree with this
alternative characterization of the recipient of the subsidies under Article 9.1(a). In addressing
Brazil's request, instead of deleting the words "potentially" and "however", we rephrased the
footnote to avoid the perception of making additional findings.
6.44. Guatemala requested that, for the sake of completeness, the Panel reflect in paragraph 7.245
the complainants' argument that, in any event, the record in these proceedings contains evidence
showing that the Central Government has made disbursements pursuant to the challenged export
subsidy schemes. We have implemented Guatemala's request.
6.45. Brazil and Australia requested a change to paragraph 7.252 and footnote 563 thereto
(footnote 523 of the Interim Report) to more fully reflect the evidence provided by the complainants.
We have made the requested changes.
6.46. To reflect more clearly the legal standard for "benefit", Brazil requested that the last sentence
of footnote 586 (footnote 546 of the Interim Report) to paragraph 7.260 be revised. We have
modified the footnote accordingly.
6.47. To enhance the clarity of the Panel's findings, Guatemala suggested amending the phrase "a
separate assessment" in paragraph 7.326 by replacing the words "a separate" with the words "an
additional". We have made the requested change.
6.48. Regarding the DFIA Scheme, India request ed that changes be made in paragraphs 7.116,
7.120, 7.121, 7.146, 7.279, 7.292, 7.301, 7.327, and 7.334 to reflect that Australia's claim concerns
the DFIA's application to sugar. Australia considers that the Interim Report is clear that Australia's
claim concerning the DFIA Scheme is limited to its application to sugar. Nevertheless, to achieve
further clarity, Australia d oes not object to the Panel making minor amendments to some of the
paragraphs identified by India. We agree with Australia that it is sufficiently clear from the Report
that Australia's claim and the Panel's findings, as well as conclusions and recommendations concern
the application of the DFIA Scheme to sugar.67 Nevertheless, to accommodate India's request, we
have made the changes requested by India in paragraphs 7.116, 7.120, 7.279, 7.291, 7.292, and
7.301.
6.4.1 Requests for review regarding the Panel's recommendation under Article 4.7 of the
SCM Agreement68
6.49. Regarding the Panel's recommendation that India withdraw its prohibited subsidies within 120
days from the adoption of the Reports in DS580 and DS581, India makes two arguments. First, India
requests that the Panel review its reco mmendation and not recommend any time -period for
compliance.69 Second, should the Panel decide to recommend a time-period for compliance under
Article 4.7, India requests that the Panel consider extending the 120-day period.70
6.50. Regarding the first argument, India submits that the Panel's recommendation has failed to
take into account the fact that, in these disputes, the measures found to be inconsistent with the
SCM Agreement have also been found to be inconsistent with the Agreement on Agriculture.71 India
points out that the Agreement on Agriculture "does not contain any special rules with respect to

67 See e.g. paras. 7.277, 7.300, and 8.6 (Panel's conclusions and recommendations in DS580) below.
68 The requests for review under this subsection concern only the disputes DS580 and DS581.
69 India's request for review, paras. 11 and 13.
70 India's request for review, para. 14.
71 India's request for review, para. 11.
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dispute settlement; nor does it provide for an expedited time -period within which a measure
inconsistent with [that Agreement] must be wit hdrawn".72 India points out that Article 19 of the
Agreement on Agriculture refers to Articles XXII and XXIII of the GATT 1994, as elaborated and
applied by the DSU. In India's view, by referring to the DSU, Article 19 requires that the time-period
for withdrawal of an inconsistent measure be determined in accordance with Article 21.3 of the
DSU.73 India considers that Article 21.3 of the DSU and Article 4.7 of the SCM Agreement cannot
apply together.74 In India's view, in light of Article 21.1 of the Agreement on Agriculture, Article 19
of the Agreement on Agriculture prevails over Article 4.7 of the SCM Agreement. 75 India further
notes that Article 1.2 of the DSU does not alter the subordination of the SCM Agreement to the
Agreement on A griculture and that it should not be read to indirectly allow Article 4.7 of the
SCM Agreement to nullify Article 21.1 of the Agreement on Agriculture.76
6.51. Regarding the second argument, India contends that its "cooperative federalism and
democratic decision -making process req uire that withdrawal of the measures be preceded by
extensive discussions with all stakeholders including the relevant State governments, thousands of
sugarcane farmers spread across several States, sugar mills, farmers' rights groups, and civil
society".77 India further underlines "the strain on human resources and other impediments caused
by the COVID-19 pandemic". India therefore requests that the Panel consider providing a period of
180 days from the date of adoption of the Reports in DS580 and DS581 to bring these measures
into compliance.78
6.52. Australia and Guatemala argue that no conflict exists between the Agreement on Agriculture
and the SCM Agreement.79 They point out that Article 19 of the Agreement on Agriculture does not
regulate the same matter as Article 4.7 of the SCM Agreement, i.e. the period of time for withdrawing
a prohibited export subsidy, and the two provisions can apply simultaneously.80 Australia points out
that, on the contrary, when India complies with the Panel's recommendation to withdraw prohibited
export subsidies it will be in compliance with both the SCM Agreement and the Agreement on
Agriculture.81 They further argue that a ny difference between Art icle 21.3(c) of the DSU and
Article 4.7 of the SCM Agreement is addressed in Article 1.2 of the DSU, which provides that where
there is a difference between the provisions of the DSU and one of the special or additional rules
and procedures in its Appendix 2 (such as Article 4.7 of the SCM Agreement), the latter prevails
over the former.82
6.53. With respect to India's request to extend the time -period for compliance, Australia argues
that the Panel should reject the request because the time-frame India seeks would not be consistent
with the requirement of Article 4.7 to withdraw the prohibited subsidies "without delay". 83 For its
part, Guatemala submits that India has not substantiated its assertion that it needs to follow a
consultative decision-making process.84 Furthermore, Australia and Guatemala stress that the Panel
has taken the impact of the COVID -19 pandemic into account when determining the 120-day
period.85
6.54. Turning to our examination of India's request, we first recall that, pursuant to Article 4.7 of
the SCM Agreement, if a measure is found to be a prohibited subsidy, the panel shall recommend

72 India's opening statement at the interim review meeting, para. 7.
73 India's opening statement at the interim review meeting, para. 10.
74 India's opening statement at the interim review meeting, para. 10.
75 India's opening statement at the interim review meeting, para. 7.
76 India's response to Guatemala's comments at the interim review meeting, para. 5.
77 India's request for review, para. 14.
78 India's request for review, para. 14.
79 Australia's comments on India's request for review, para. 10; Guatemala's comments on India's request
for review, paras. 10-11.
80 Australia's comments on India's request for review, paras. 9 and 12 -13; Guatemala's comments on
India's request for review, para. 15.
81 Australia's comments on India's request for review, para. 14.
82 Australia's comments on India's request for review, para. 17; Guatemala's opening statement at the
interim review meeting, para. 3.2; c omments on India's opening statement at the interim review meeting,
paras. 6-11.
83 Australia's comments on India's request for review, para. 20.
84 Guatemala's comments on India's request for review, para. 27; comments on India's opening statement
at the interim review meeting, para. 14.
85 Australia's comments on India's request for review, para. 21; Guatemala's comments on India's request
for review, para. 26.
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that the subsidizing Member withdraw the subsidy without delay and recommend t he time‑period
within which the measure must be withdrawn. By contrast, Art icle 19 of the Agreement on
Agriculture stipulates that "[t]he provisions of Articles XXII and XXIII of GATT 1994, as elaborated
and applied by the Dispute Settlement Understanding, shall apply to consultations and the
settlement of disputes under [the Agreement on Agriculture]." Accordingly, if a measure is found to
be inconsistent with the Agreement on Agriculture, a reasonable period of time for compliance would
be determined in accordance with Article 21.3 of the DSU.
6.55. In India's view, the conflict between Article 21.3 of the DSU (which Article 19 of the Agreement
on Agriculture refers to) and Article 4.7 of the SCM Agreement is "glaring" and should be resolved
by means of Article 21.1 of the Agreement on Agriculture .86 Article 21.1 provides that "[t] he
provisions of GATT 1994 and of other Multilateral Trade Agreements in Annex 1A to the WTO
Agreement shall apply subject to the provisions of [the Agreement on Agriculture]". In previous
disputes, WTO panels and the Appellate Body have outlined three situat ions in which Article 21.1
can apply: (i) where the Agreement on Agriculture provides an explicit carve-out or exemption from
the disciplines of Article 3.1 of the SCM Agreement; (ii) where it would be impossible for a Member
to comply with its obligations under the Agreement on Agriculture and the SCM Agreement
simultaneously; and (iii) where the Agreement on Agriculture explicitly authorizes a measure that
would otherwise be prohibited under Article 3.1 of the SCM Agreement.87
6.56. In our view, the relationshi p between Article 19 of the Agreement on Agriculture and
Article 4.7 of the SCM Agreement does not amount to a conflict. As India argues, Article 19 of the
Agreement on Agriculture does not prescribe any time -period within which a measure found to be
inconsistent with that Agreement must be brough t into conformity. By contrast, Article 4.7 of the
SCM Agreement requires a panel to determine a time -period during which a prohibited subsidy
should be withdrawn.88 This, however, does not mean that the two provisions are in conflict. Article
19 of the Agreement on Agriculture does not provide any carve -out from the provisions of Article
4.7 of the SCM Agreement . Furthermore, by complying with the Panel's recommendation under
Article 4.7 of the SCM Agreement, India will simultaneously bring its measures into compliance with
the Agreement on Agriculture.
6.57. In addition, the reference in Article 19 of the Agreement on Agriculture to the DSU means
that a time -period for compliance with findings of violation under the Agre ement on Agriculture
would have to be determined pursuant to Article 21.3(c) of the DSU. Any conflict between
Article 21.3(c) of the DSU and Article 4.7 of the SCM Agreement would be addressed in Article 1.2
of the DSU. Article 1.2 of the DSU stipulates th at, to the extent that there is a difference between
the rules and procedures of the DSU and the special or additional rules and procedures set forth in
Appendix 2 of the DSU, the special or additional rules and procedures in Appendix 2 shall prevail.
Article 4.7 of the SCM Agreement is listed in Appendix 2 as a special or additional rule. Hence, the
provisions of Article 21.3(c) are not relevant in determining the appropriate time -period under
Article 4.7 of the SCM Agreement.89 Therefore, contrary to what India argues, the difference between
Article 21.3(c) of the DSU and Article 19 of the Agreement on Agriculture does not give rise to a
conflict within the meaning of Article 21.1 of the Agreement on Agriculture.
6.58. In light of the above, we reject India's request that the Panel review its recommendation and
not recommend any time-period for compliance.
6.59. We now proceed to address India's request that we extend the 120-day period for compliance.
We have no reason to put in doubt India's assertion t hat its system of cooperative federalism and
democratic decision -making requires consultations with stakeholders in adopting or modifying
trade-related legislation. This, however, is a concern shared by many, if not all, WTO Members. We
do not see it as a factor that would justify extending the time -period we determined. Further, we
note that the measures to be withdrawn are not statutes that would have required a legislative

86 India's response to Guatemala's comments at the interim review meeting, para. 5.
87 Appellate Body Report, US – Upland Cotton, para. 532 (quoting Panel Report, US – Upland Cotton,
para. 7.1038). As a general point, we agree with India that the instances in which a conflict can arise, referred
to by previous panels and the Appellate Body, may not be exhaustive. (See India's opening statement at the
interim review meeting, para. 11) However, as explained below, we do not agree with India that the
relationship between Article 19 of the Agreement of Agriculture and Article 4.7 of the SCM Agreement amounts
to a conflict.
88 India's opening statement at the interim review meeting, para. 9.
89 Appellate Body Reports, Brazil – Aircraft, paras. 191-192; Brazil – Taxation, para. 5.454.
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process for withdrawal or modification , which typically take s more time than modif ying or
withdrawing administrative instruments. In addition, as Australia and Guatemala point out, we have
already taken into account the impact of the COVID -19 pandemic on the functioning of the public
sector in India in determining the time-period for compliance.90
6.60. As a result, we do not consider it appropriate to revise our recommendation that India
withdraw its prohibited subsidies within 120 days.
6.5 Requests for review of section 7.3 (Notifications)
6.61. Australia requested amending the final sentence of paragraph 7.336 in order to clarify India's
argument that Australia has failed to establish that India was required to submit notifications
pursuant to Article 18 of the Agreement on Agricu lture, Article 25 of the SCM Agreement , and
Article XVI of the GATT 1994. We have modified the paragraph accordingly.
6.6 Requests for review of the Appendix (Calculation of India's market price support to
sugarcane producers for the 2014-15 to 2018-19 sugar seasons)
6.62. Since the Appendix contains factual and legal findings by the Panel, Brazil requested that the
content of the Appendix be included in the main body of the Panel Report, for instance within
section 7.1.3.2.3. Brazil considered that this would enhance the accessibility of the Panel Report.
We note that the legal status of the Appendix as an integral part of the Panel Report is unquestioned.
We consider it relevant, in addressing this request, that the findings contained in the Appendix are
of a highly technical nature and are concerned exclusively with the application, in the specific
circumstances of these disputes, of paragraph 8 of Annex 3 to the Agreement on Agriculture. Given
the level of technical complexity of those findings, as well as the fact that the findings contained
therein are specific to the circumstances of these disputes, we consider that articulating those
findings in the Appendix – rather than the main body of the Report – results in a clearer and more
readable Panel Report. In our view, accepting Brazil's request would in fact decrease the accessibility
of the Panel's findings. We therefore decline this request.
6.63. Concerning paragraph 2.1 of the Appendix, Guatemala reques ted us to refer to the
complainants, instead of solely Brazil and Australia, and to appropriately revise footnote 15. We
have revised the Appendix accordingly.
6.64. Regarding footnote 138 to paragraph 6.2 of the Appendix, Brazil and Australia requested us
to revisit our explanation for the minor discrepancies between the results of the Panel's calculations
and those of the complainants. We have implemented the modification requested by Brazil and
Australia, by revising footnotes 128 and 138.
7 FINDINGS
7.1 Domestic support
7.1.1 Introduction
7.1. The complainants claim that India is acting inconsistently with Article 7.2(b) of the Agreement
on Agriculture by providing domestic support to sugarcane producers in excess of the de minimis
level set out in Article 6.4 of the Agreement on Agriculture.91 The complainants argue that India has
no domestic support commitment in its Schedule, and consequently, pursuant to Article 7.2(b), read
in light of Article 6.4, India may not provide product -specific domestic support to sugarcane
producers that exceeds 1 0% of the total value of sugarcane production. 92 On this basis, the
complainants provide evidence and calculations seeking to demonstrate that, in each sugarcane
season from 2014 -15 to 2018 -19, India provided product-specific domestic support to sugarcane

90 See para. 7.333 below.
91 See e.g. Brazil's second written submission, para. 151; Australia's second written submission,
92 See e.g. Brazil's first written submission, para. 3; Aus tralia's first written submission, paras. 108 and
110; Guatemala's first written submission, paras. 112-114.
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producers, in excess of the permitted level, through: (i) market price support and (ii) non-exempt
direct payments or other non-exempt policies.93
7.2. India agrees with the complainants that it has no Total AMS commitment in its Schedule. 94
However, India submits that the complainants' identification of market price support in India is based
on a mistaken interpretation of the term "market price support" in the Agreement on Agriculture. 95
India argues that market price support can only exist when the government or its agents pay for or
procure the product in question. 96 In India's view, the complainants have consequently failed to
demonstrate that India provides any market price support to sugarcane producers. 97 According to
India, since the complainants have fa iled to demonstrate the existence of market price support to
sugarcane producers, the complainants have also failed to demonstrate how the total support
provided to sugarcane producers exceeds the permitted level of domestic support.98 India therefore
considers that the complainants have failed to demonstrate that India is acting inconsistently with
Article 7.2(b).99
7.3. We consider it useful to briefly outline certain aspects of the Agreement on Agriculture related
to the present dispute. We begin by noting that several provisions in the Agreement on Agriculture
refer to the "Aggregate Measurement of Support" (AMS). Article 1(a) defines AMS as:
[T]he annual level of support, expressed in monetary terms, provided for an agricultural
product in favour of the prod ucers of the basic agricultural product or non -product-
specific support provided in favour of agricultural producers in general, other than
support provided under programmes that qualify as exempt from reduction under Annex
2 to this Agreement, which is:
(i) with respect to support provided during the base period, specified in
the relevant tables of supporting material incorporated by reference in
Part IV of a Member's Schedule; and
(ii) with respect to support provided during any year of the
implementation period and thereafter, calculated in accordance with the
provisions of Annex 3 of this Agreement and taking into account the
constituent data and methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member's Schedule;
7.4. Article 1(h) further defines "Total AMS":
"Total Aggregate Measurement of Support" and "Total AMS" mean the sum of all
domestic support provided in favour of agricultural producers, calculated as the sum of
all aggregate measurements of support for basic agricultural products, all non-product-
specific aggregate measurements of support and all equivalent measurements of
support for agricultural products, and which is:
(i) with respect to support provided during the base period (i.e. the
"Base Total A MS") and the maximum support permitted to be provided
during any year of the implementation period or thereafter (i.e. the "Annual
and Final Bound Commitment Levels"), as specified in Part IV of a Member's
Schedule; and
(ii) with respect to the level of support actually provided during any year
of the implementation period and thereafter (i.e. the "Current Total AMS"),
calculated in accordance with the provisions of this Agreement, including
Article 6, and with the constituent data and methodology used in the tables

93 See e.g. Brazil's first written submission, paras. 131 -167; Australia's first written submission,
paras. 149-209; Guatemala's first written submission, paras. 137-191.
94 India's response to Panel question No. 46.
95 See e.g. India's first written submission, paras. 59 and 62-63.
96 See e.g. India's first written submission, para. 62; second written submission, para. 31.
97 See e.g. India's second written submission, para. 8.
98 See e.g. India's second written submission, para. 57.
99 See e.g. India's second written submission, para. 58.
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of supporting material incorporated by reference in Part IV of the Member's
Schedule[.]
7.5. Turning to the obligations that Members have undertaken with respect to the provision of
domestic support to agricultural producers, we note that Members shall not provide domestic support
in excess of the amounts they have committed to, as inscribed in their Schedules.100 The Agreement
on Agriculture also covers the situation where a Member has specified no domestic support
commitment in its Schedule. Specifically, Article 7.2(b) states that:
Where no Total AMS commitment exists in Part IV of a Member's Schedule, the Member
shall not provide support to agricultural producers in excess of the relevant de
minimis level set out in paragraph 4 of Article 6.
7.6. Regarding the relevant de minimis level, Article 6.4 elaborates that:
(a) A Member shall not be required to include in the calculation of its Current Total AMS
and shall not be required to reduce:
(i) product-specific domestic support which would otherwise be required
to be included in a Member's calculation of its Current AMS where such
support does not exceed 5 per cent of that Member's total value of
production of a basic agricultural product during the relevant year; and
(ii) non-product-specific domestic support which would otherwise be
required to be included in a Member's calculation of its Current AMS where
such support does not exceed 5 per cent of the value of that Member's total
agricultural production.
(b) For developing country Members, the de minimis percentage under this paragraph
shall be 10 per cent.
7.7. Article 6.4 thus excludes from the calculation of a Member's Current Total AMS, and exempts
from its reduction commitments, a de minimis level of domestic support in relation to both the
product-specific and non-product-specific components of its Current Total AM S. For developing
country Members, such as India, the de minimis level is 10% for each product-specific component
(i.e. support in favour of a specific basic agricultural product), and 10% for the non-product-specific
component (i.e. support provided generally to agricultural production) . We note that certain
provisions of the Agreement on Agriculture also exclude certain types of measures from inclusion in
the calculation of a Member's AMS, thereby exempting such measures from the relevant reduction
commitments.101
7.8. In the context of the present disputes, we understand that sugarcane is a basic agricultural
product, within the mean ing of the Agreement on Agriculture. 102 We further note the parties'
agreement that India's Schedule contains no Total AMS commitment.103 Based on our own review
of India's Schedule, we too agree that India's Schedule contains no Total AMS commitment.104

100 In this respect, Article 3.1 of the Agreement on Agriculture states that "[t]he domestic support …
commitments in Part IV of each Member's Schedule constitute commitments limiting subsidization and are hereby
made an integral part of GATT 1994." Articles 3.2 and 6.3 of the Agreement on Agriculture set out the essential
obligation that Members may not provide domestic support in excess of the commitment levels specified in their
Schedules.
101 See e.g. paragraph 7.25 below.
102 This assertion by the complainants is uncontested by India. (Brazil's first written submission, para. 90;
Australia's first written submission, para. 154; Guatemala's first written submission, para. 101)
103 Brazil's first written submission, paras. 65 -69; Australia's first written submission, paras. 103 –104;
Guatemala's first written submission, paras. 109–110; India's response to Panel question No. 46.
104 Schedule XII – India ("India's Schedule"), Part IV. We note, in particular, that the columns in Part IV
of the Schedule titled "Base Total AMS" and "Annual and final bound commitment levels" are blank. The column
titled "Relevant Supporting Tables and document reference" refers to supporting document "AGST/IND". Th at
supporting document, G/AG/AGST/IND, states, under the heading "Domestic Support", that "India is not required
to undertake any reduction commitment as the average Total Aggregate Measuremen t of Support is ( -) Rs.
198608 millions (-18 per cent of the value of output)." (G/AG/AGST/IND, p. 3, para. 4)
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7.9. Since India specified no Total AMS commitment in its Schedule, Article 7.2(b) stipulates that
India may not provide non-exempt support to sugarcane producers in excess of the relevant de
minimis level set out in Article 6.4. 105 More precisely, since India i s a developing country,
Article 7.2(b), r ead in light of Article 6.4, stipulates that India may not provide non-exempt
product-specific domestic support in excess of 10% of the total value of production of any basic
agricultural product (including sugarcane), or non-exempt non-product-specific domestic support in
excess of 10% of the value of India's total agricultural production.
7.10. The complainants assert that India is acting inconsistently with Article 7.2(b) by providing
non-exempt product-specific106 domestic support to sugarcane producers that exceeds 10% of the
total value of sugarcane production in India. The complainants seek to substantiate this assertion
by demonstrating that, for each sugar season from 2014 -15 to 2018 -19, India provided such
non-exempt product-specific domestic support in excess of 10% of the total value of its sugarcane
production.
7.11. For our purposes, in assessing India's compliance with Article 7.2(b), we consider it
appropriate to examine whether India's non-exempt product-specific domestic support to sugarcane
producers exceeded 10% of the total value of sugarcane production during recent "relevant
years".107 We agree with the complainants that, in the context of India's sugarcane production, a
"relevant year" within the meaning of the Agreement on Agriculture refers to a sugar season.108 We
therefore proceed to examine the complainants' assertions regarding India's provision of domestic
support to sugarcane producers in each sugar season from 2014-15 to 2018-19.109
7.12. We note that conducting this assessment essentially entails comparing two amounts for each
season: (i) the level of product-specific domestic support to sugarcane producers that India was
permitted to provide in each season; and (ii) the amount of non-exempt product-specific domestic
support, if any, that India actually provided to sugarcane producers in each season (i.e. India's AMS
to sugarcane producers) . We therefore proceed by assessing each of these issues in turn. Our
conclusion as to India's consistency with Article 7.2(b) is based on a comparison of these two figures
for each season.
7.1.2 India's permitted level of product-specific support to sugarcane producers
7.13. As a first step in our analysis, we address the maximum level of domestic support that India
was permitted to provide to sugarcane producers during each sugar season from 2014 -15 to
2018-19. We recall that, under Article 7.2(b) of the Agreement on Agriculture, India was permitted
to provide product-specific support to sugarcane producers up to but not exceeding 10% of the total
value of its sugarcane production.110

105 In their first written submissions, in addition to their claims under Article 7.2(b), the complainants also
argued that India was acting incons istently with Articles 3.2 and 6.3 of the Agreement on Agriculture. T he
complainants' claims under Article 7.2(b) are premised on their understanding that India's Schedule contains no
commitment with respect to domestic support , and their claims under Articles 3.2 and 6.3 are only "in the
alternative", in the event that India had indeed inscribed such a commitment in its Schedule. (See complainants'
responses to Panel question No. 15) Since India's Schedule contains no such commitment, it is unnecessary for
us to address the complainants' claims under Articles 3.2 and 6.3. (See also fn 51 to para. 3.1, fn 54 to para 3.4,
106 The complainants focus exclusively on India's non-exempt product-specific domestic support for
sugarcane and have not raised any arguments or evidence regarding the non-product-specific component of
India's obligations. (See e.g. Brazil's first written submission, heading III.C; Australia's first written submission,
heading III.C; Guatemala's first written submission, para. 114)
107 Article 6.4(a)(i) of the Agreement on Agriculture refers to " product-specific domestic support which
would otherwise be required to be included in a Member's calculation of its Current AMS where such support
does not exceed 5 per cent of that Member's total value of production of a basic agricultural product during the
relevant year". (emphasis added)
108 Article 1(i) of the Agreement on Agriculture explains that the term "'year' … refers to the calenda r,
financial or marketing year specified in the Schedule relating to that Member. " We understand that India's
Schedule identifies the "marketing year" as the "relevant year" for calculating domestic support.
(G/AG/AGST/IND, p. 4, para. 6) It is uncontested that this refers to the sugar season in India, beginning in
October and end ing in September of the following year. (See e.g. Brazil's first written submission, fn 99 to
Table 9 on p. 24; Guatemala's first written submission, paras. 107-108; India's first written submission, para. 18)
109 We note that India does not contest this evidentiary approach.
110 See para. 7.9 above.
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7.14. As evidence of India's total value of production of sugarcane for each season, the
complainants submit the official Indian Ministry of Statistics and Programme Implementation
(MOSPI) National Accounts Statistics 2020.111 Entry 4 of this document indicates t he value of
production for each relevant sugar season for "Sugars". Under "Sugars", the document indicates the
value of production for "Sugarcane" (sub -entry 4.1), "gur" (sub -entry 4.2), and "others"
(sub-entry 4.3).112 Based on a 2007 manual published by MOSPI, titled "National Accounts Statistics
Sources and Methods"113, the complainants note that, in addition to sub-entry 4.1 (sugarcane), the
data in sub-entry 4.2 (gur) may also be relevant to the total value of production of sugarcane.114
7.15. India does not c ontest the complainants' factual assertions regarding the total value of
production for each sugar season from 2014-15 to 2018-19.115
7.16. We have reviewed the MOSPI data, as well as the explanations in the 2007 MOSPI manual.
According to the 2007 manual, "total sugarcane production [in the official MOSPI statistics] is divided
into two parts viz., sugarcane utilised as such and the sugarcane converted into gur."116 We therefore
understand that the total value of production of sugarcane in India is divided between
sub-entries 4.1 (sugarcane) and 4.2 (gur). 117 For our purposes, we see no reason to exclude the
sugarcane used to produce gur from the calculation of India's total value of production of sugarcane
for each sugar season from 2014-15 to 2018-19.118
7.17. We therefore calculate 10% of the total value of production of sugarcane for each sugar
season from 2014 -15 to 2018 -19, to find the maximum level of domestic support that India was
permitted, under the Agreement on Agriculture, to provide to sugarcane producers during each sugar
season:
Sugar
season
Total value of sugarcane production
(INR million)119
India's permitted level of product-
specific support to sugarcane
producers (INR million)120
2014-15 965,290.00 96,529.00
2015-16 958,640.00 95,864.00

111 Brazil's Calculation of India's Domestic Support for Sugarcane, (Exhibit BRA -1 (revised -3)), "C-27
Value of production" spreadsheet; Australia's Domestic Support Calculations, (Exhibit AUS -1 (revised 23 March
2021)), "ValueOfProduction" spreadsheet; Guatemala's Cal culations of India's AMS (Exhibit GTM -45 (revised
12 May 2021)), "TVP" spreadsheet ; Ministry of Statistics and Programme Implementation (MOSPI), National
Accounts Statistics 2020, Statement 8.1.2 Crop-wise value of output, (Exhibit JE-147).
112 MOSPI, National Accounts Statistics 2020, Statement 8.1.2 Crop-wise value of output, (Exhibit JE-147).
113 MOSPI, National Accounts Statistics Sources and Methods 2007, Chapter 9, (Exhibit JE-168).
114 See complainants' responses to Panel question No. 60.
115 The complainants requested India to clarify the correct figures to be used to calculate the de minimis
level of domestic support that India was entitled to provide to sugarcane producers for each relevant sugar
season. (Complainants' responses to Panel question No. 60; Guatemala's questions to India following the second
substantive meeting with the Panel, question No. 1) In response, India states that: "(i) the complainants,
including Guatemala, have failed to demonstrate why the FRP/SAP measures qualify as market price support;
and (ii) the complainants bear the burden to explain the relevance or accuracy of the so called evidence which
they have sought to rely on in support of their erroneous claims on market price support." (India's response to
Guatemala's questions to India following the second substantive meeting with the Panel, question No. 1)
116 MOSPI, National Accounts Statistics Sources and Methods 2007, Chapter 9, (Exhibit JE -168), p. 97.
We note Guatemala's explanation that "gur" is a type of " unrefined or partially refined sugar that [is] produced
from sugarcane". (Guatemala's first written submission, para. 39)
117 The Manual also indicates that "in the case of sugarcane, outturn excluding the quantity converted into
gur by the cane growers is taken and gur is evaluated separately" and that "[c]onversion of sugarcane into gur
is an activity undertaken by the agriculturists." (MOSPI, National Accounts Statistics Sources and Methods 2007,
Chapter 9, (Exhibit JE-168), pp. 95 and 97)
118 We note that certain of the complainants have expressed reservations regarding whether the 2007
Manual continues to be relevant to contemporary MOSPI statistics. (See e.g. Brazil's response to Panel question
No. 60, para. 5; Australia's response to Panel question No. 60, para. 14) However, we see no reason to conclude
that the explanation set out in the 2007 Manual regarding "sugarcane" and "gur" would not continue to apply to
contemporary MOSPI statistics.
119 These figures represent the sum of sub-entries 4.1 ("Sugarcane") and 4.2 ("gur") of the MOSPI National
Accounts Statistics 2020, (Exhibit JE-147). In representing these figures here, we understand that the term crore
as used in the MOSPI National Accounts Statistics refers to tens of millions. (See Brazil's first written submission,
fn 3 to Table 1; Australia's first written submission, p. 27; Guatemala's first written submission, p. v. India does
not contest the complainants' explanation of India's numbering system.)
120 I.e. the de minimis level of 10% of the total value of sugarcane production.
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Sugar
season
Total value of sugarcane production
(INR million)119
India's permitted level of product-
specific support to sugarcane
producers (INR million)120
2016-17 946,980.00 94,698.00
2017-18 1,173,510.00 117,351.00
2018-19 1,230,490.00 123,049.00

7.1.3 India's actual amount of non -exempt product -specific support to sugarcane
producers
7.1.3.1 General considerations
7.18. The second step of our analysis entails determining the amount of non-exempt
product-specific domestic support that India actually provided to sugarcane producers for each sugar
season from 2014 -15 to 2018 -19. We refer to this amount, for ea ch season, as India's AMS to
sugarcane producers.
7.19. The complainants assert that, pursuant to Article 6.1 of the Agreement on Agriculture, any
measure that provides support to agricultural producers should be included in the calculation of a
Member's AMS, u nless that measure is exempted from that calculation pursuant to a relevant
provision of the Agreement on Agriculture. 121 The complainants also note that, under paragraph 1
of Annex 3 of the Agreement on Agriculture, a Member's product-specific AMS shall be calculated on
the basis of "market price support, non-exempt direct payments, or any other subsidy not exempted
from the reduction commitment ( 'other non-exempt policies')".122 The complainants submit that
India provides market price support to sugarcane p roducers in the form of measures, at both the
Central and State Government levels, that require sugar mills and factories to pay a minimum price
for sugarcane.123 The complainants also allege that several State Governments maintain policies or
payments that constitute "non-exempt direct payments" or "other non-exempt policies" that should
be included in the calculation of India's AMS to sugarcane producers.124
7.20. India argues that the legal instruments identified by the complainants as comprising "market
price support" do not fall within the scope of market price support within the meaning of the
Agreement on Agriculture.125 India submits that market price support, under the A greement on
Agriculture, only exists when the government pays for and procu res the relevant agricultural
product.126 Since the instruments identified by the complainants as market price support fail to
satisfy this key requirement, India argues that they should be excluded from the calculation of India's
AMS to sugarcane producers .127 India further considers that, since these instruments should be
excluded from the calculation, the c omplainants have failed to demonstrate that India is acting
inconsistently with its domestic support obligations, because the amounts of the other domestic
support measures identified by the complainants (i.e. the "non-exempt direct payments" and "other
non-exempt policies") do not exceed India's permitted amounts of domestic support.128

121 Brazil's second written submission, paras. 16-18; Australia's second written submission, paras. 38-39;
Guatemala's opening statement at the second substantive meeting of the Panel, para. 2.17.
122 Brazil's first written submission, paras. 94 -95; Australia's first written submission, para. 111;
Guatemala's first written submission, para. 115.
123 Brazil's first written submission, paras. 25-48, 132-133, 135-139 and 156-160; Australia's first written
submission, paras. 21 -61 and 153 -156; Guatemala's first writt en submission, paras. 37 -72 and 137 -144. The
complainants also identify certain measures that allegedly assist sugarcane purchasers to pay the mandatory
minimum prices. ( Brazil's first written submission, paras. 161 -162 and Appendix A; Australia's first wr itten
submission, paras. 181 -185 and Annexes A , B, C, D -2, D -3 and E; Guatemala's first written submission,
paras. 87-96 and 166 -168) The complainants do not include these measures in their calculations of India's
alleged market price support. (See fn 41 to para. 2.3 above and para. 7.70 below)
124 Brazil's first written submission, paras. 49 -54 and 161 -165; Australia's first written submission,
paras. 189-205; Guatemala's first written submission, paras. 76-86, 97-98 and 166-189.
127 India's first written submission, paras. 63-65; second written submission, paras. 28-29 and 31.
128 India's first written submission, paras. 81-83; second written submission, para. 6.
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7.21. At the outset, we consider it useful to set out our understanding of the structure and logic of
the rules in the Agreement on Agriculture regarding the calculation of a Member's AMS. Pursuant to
Article 6.1 of the Agreement on Agriculture:
The domestic support reduction commitments of each Member contained in Part IV of
its Schedule shall apply to all of its domestic support measures in favour of agricultural
producers with the exception of domestic measures which are not subject to reduction
in terms of the criteria set out in this Article and in Annex 2 to this Agreement.
7.22. Article 1(a)(ii) of the Agreement on Agriculture explains that a Member's AMS in any year
during and after the implementation period is to be "calculated in accordance with the provisions of
Annex 3 of this Agreement and taking into account the constituent data and methodology used in
the tables of supporting material incorporated by reference in Part IV of the Member 's Schedule".
Article 1(h)(ii) indicates that the calculation of a Member's Total AMS, for any year during or after
the implementation period, is to be "in accordance with the provisions of this Agreement, including
Article 6, and with the constituent data and methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member's Schedule".
7.23. Annex 3 of the Agre ement on Agriculture is titled " Domestic Support – Calculation of
Aggregate Measurement of Support". Paragraph 1 of Annex 3 provides that:
Subject to the provisions of Article 6, an Aggregate Measurement of Support (AMS) shall
be calculated on a product -specific basis for each basic agricultural product receiving
market price support, non-exempt direct payments, or any other subsidy not exempted
from the reduction commitment ("other non-exempt policies").
7.24. The additional paragraphs of Annex 3 elaborate on various aspects of the calculation of AMS.
For instance, paragraph 2 indicates that "[s]ubsidies under paragraph 1 shall include both budgetary
outlays and revenue foregone by governments or their agents." Paragraph 3 clarifies that "[s]upport
at both the national and sub-national level shall be included." Paragraph 7 states that the AMS "shall
be calculated as close as practicable to the point of first sale of the basic agricultural product
concerned" and that "[m]easures directed at agricultural processors shall be included to the extent
that such measures benefit the producers of the basic agricultural products." Paragraphs 8-9, 10-12,
and 13 concern specific methodologies for calculating the amount of, respectively, "[m]arket price
support", "[n]on-exempt direct payments", and "[o]ther non-exempt measures".
7.25. In addition to the de minimis exemptions set out in Article 6.4, the Agreement on Agriculture
also specifically exempts certain categories of support measures from the calculation of a Member's
AMS. Fo r instance, Article 6.2 refers to "government measures of assistance, whether direct or
indirect, to encourage agricultural and rural development …, investment subsidies which are
generally available to agriculture in developing country Members and agricul tural input subsidies
generally available to low -income or resource -poor producers in developing country Members".
Article 6.5 refers to "[d]irect payments under production-limiting programmes" that are "based on
fixed area and yields", "made on 85 per cent or less of the base level of production", or constitute
"livestock payments … made on a fixed number of head". Annex 2 of the Agreement on Agriculture
sets forth certain conditions that, if satisfied, would exempt certain types of measures from the
calculation of a Member's AMS.
7.26. In our view, the rules for calculating AMS, as set out in the Agreement on Agriculture and
outlined above, contain a clear logic: any measure by a Member that provides support to its domestic
agricultural producers must be included in the calculation of that Member's AMS unless the measure
is shown to be exempted or otherwise excluded pursuant to a provision of the Agreement on
Agriculture.
7.27. In this respect, we consider it important to emphasize that India does not contend that any
of the legal instruments or measures identified by the complainants are exempted from the
calculation of AMS pursuant to Article 6 or Annex 2 of the Agreement on Agriculture. We note, in
particular, that India does not invoke any of the exemptions conta ined in Article 6.2 pertaining to
developing country Members.129 Rather, as described above, India's essential argument is that under

129 See India's response to Panel question No. 51.
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a correct interpretation of paragraph 1 of Annex 3, read in light of paragraph 2, measures such as
the FRP and SAPs should be excluded from the calculation of AMS.130
7.28. We proceed to determine India's AMS to sugarcane producers in three steps. First, we address
the parties' arguments and evidence regarding the alleged market price support. 131 Second, we
assess the parties' arguments and evidence concerning the alleged non-exempt direct payments and
other non-exempt policies. Third, and finally, we calculate the sum of the market price support,
non-exempt direct payments, and other non -exempt policies that have been shown to exist, to
determine the total amount of India's product-specific AMS to sugarcane producers for each season
from 2014-15 to 2018-19.
7.1.3.2 Market price support
7.1.3.2.1 Overview
7.29. The complainants argue that India provides market price sup port to sugarcane producers
through the Fair and Remunerative Price (FRP), a measure maintained by the Indian Central
Government that requires sugar producers to pay a minimum price for sugarcane that is determined
by the Central Government on an annual basis.132 In addition, the complainants submit that certain
State Governments in India provide market price support in the form of so -called State-Advised
Prices (SAPs), through which these State Governments annually set mandatory minimum prices that
are higher than the FRP.133 Applying the methodology in paragraph 8 of Annex 3 to calculate market
price support, the complainants assert that the FRP and (in those States where they are applicable)
SAPs constitute relevant applied administered prices (AAPs).134 The complainants also provide data
regarding the quantity of eligible production (QEP) in different States135 and calculate adjusted fixed
external reference prices (FERPs) to account for sugarcane quality differences 136 across different
States and seasons.137 Using these data, the complainants calculate the level of market price support
for each season from 2014-15 to 2018-19.138 The complainants also identify certain measures that,
in their view, constitute budgetary payments made by India to maintain the price gap between the
AAP and the FERP.139
7.30. According to India, paragraph 1 of Annex 3 of the Agreement on Agriculture indicates that
market price support must be in the form of a subsidy. Moreover, India argues, paragraph 2 of

130 See para. 7.20 above.
131 We note that, w hile the complainants have argu ed that the FRP and SAPs should be included in the
calculation of India's AMS simply on the basis that they constitute "domestic support" measures, the
complainants also specifically identify these measures as comprising "market price support" within the m eaning
of Annex 3 of the Agreement on Agriculture. (See e.g. Brazil's first written submission, paras. 132 -133;
Australia's second written submission, para s. 85 and 150-152; Guatemala's first written submission, para. 1;
Guatemala's second written submissi on, para. 3 ) Moreover, the complainants have calculated the level of
domestic support allegedly provided by these measures by applying exclusively the calculation methodology
contained in paragraphs 8 and 9 of Annex 3 of the Agreement on Agriculture.
132 Brazil's first written submission, paras. 25 -34 and 134 -155; Australia's first written submission,
paras. 23-39 and 166-173; Guatemala's first written submission, paras. 37-50 and 137-165.
133 Brazil's first written subm ission, paras. 35 -48 and 156 -160; Australia's first written submission,
paras. 41-61 and 174-180; Guatemala's first written submission, paras. 51-72 and 137-165.
134 Brazil's first written submission, paras. 142 and 156; Australia's first written submission ,
paras. 153-156; Guatemala's first written submission, paras. 140-144.
135 MOSPI, National Accounts Statistics 2020, Statement 8.1.2 Crop-wise value of output, (Exhibit JE-147).
136 Brazil's first written submission, paras. 146-147; Australia's first written submission, paras. 160-162;
Guatemala's first written submission, paras. 146-147.
137 Brazil's first written submission, paras. 145 -148; Brazil's Calculation of India 's Domestic Support for
Sugarcane, (Exhibit BRA -1 (revised -3)), "FERP" spreadsheet; Austra lia's first written submission,
paras. 157-162; Australia's Domesti c Support Calculations, (Exhibit AUS -1 (revised 23 March 2021), "FERP"
spreadsheet; Guatemala's first written submission, paras. 145 -147; Guatemala's Calculations of India's AMS
(Exhibit GTM-45 (revised 12 May 2021)), "FERP details" spreadsheet.
138 See Brazil's Calculation of India's Domestic Support for Sugarcane, ( Exhibit BRA -1 (revised -3));
Australia's Domestic Support Calculations, (Exhibit AUS -1 (revised 23 March 2021)); Guatemala's Cal culations
of India's AMS (Exhibit GTM-45 (revised 12 May 2021)).
139 Brazil's first written submission, paras. 161 -162 and Appendix A; Australia's first written submission,
paras. 181-185 and Annexes A, B, C, D -2, D-3 and E; Guatemala's first written submis sion, paras. 87-96 and
166-168. The complainants do not include these measures in their calculations of India's alleged market price
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Annex 3 limits the scope of subsidies to "budgetary outlays and revenue foregone".140 Alternatively,
India argues, even if paragraph 2 does not explicitly limit the scope of subsidies in this way, it
nevertheless reveals that subsidies should share the essential characteristics of "budgetary outlays
and revenue foregone".141 India submits that, since the FRP and SAPs are payable by sugar mills
and not the Central or State Governments, these measures are not subsidies, therefore do not
constitute market price support within the meaning of the Agreement on Agriculture , and
consequently should not be counted towards India's AMS to sugarcane producers.142 While India
argues that these measures should be excluded from the calculation of its AMS, India does not
otherwise contest or raise any reason to doubt the complainants' evidence or their application of the
methodology set out in paragraph 8 of Annex 3.143
7.31. Annex 3 of the Agreement on Agriculture is titled "Domestic Support: Calculation of Aggregate
Measurement of Support". Paragraph 1 of Annex 3 indicates that, subject to Article 6, AMS "shall be
calculated on a product -specific basis for each basic agricultural product receiving market price
support, non -exempt direct payments, or any other subsidy not exempted from the re duction
commitment".144 Paragraphs 8 and 9 of Annex 3 directly concern the calculation of a Member's
market price support.
7.32. Paragraph 8 states:
Market price support: market price support shall be calculated using the gap between a
fixed external reference price [FERP] and the applied administered price [AAP]
multiplied by the quantity of production eligible [QEP] to receive the applied
administered price. Budgetary payments made to maintain this gap, such as buying-in
or storage costs, shall not be included in the AMS.
7.33. Thus, pursuant to the first sentence of paragraph 8, to calculate market price support, an AAP
must be subtracted from a FERP, and the difference multiplied by the QEP.145 Under the second
sentence of paragraph 8, "budgetary payments made to maintain" the gap between the FERP and
the AAP should be excluded from the calculation of market price support.
7.34. Paragraph 9 provides further guidance on the application of the methodology set out in
paragraph 8, specifically with regard to the FERP component. Pursuant to paragraph 9:
The fixed external reference price shall be based on the years 1986 to 1988 and shall
generally be the average f.o.b. unit value for the basic agricultural product concerned
in a net exporting country and the average c.i.f. un it value for the basic agricultural
product concerned in a net importing country in the base period. The fixed reference
price may be adjusted for quality differences as necessary.
7.35. Annex 4 of the Agreement on Agriculture is titled: " Domestic Support: Calculation of
Equivalent Measurement of Support". Under its explicit terms, Annex 4 pertains to situations "where
market price support as defined in Annex 3 exists but for which calculation of this component of the
AMS is not practicable ". We note that, in the context of this dispute, the complainants have not
sought to apply the methodology contained in Annex 4.
7.36. We proceed with our analysis in three steps. First, we assess the parties' disagreement over
the correct interpretation of the term "market price sup port" in the Agreement on Agriculture .
Specifically, we address whether "market price support" refers exclusively to measures entailing

141 India's second written submission, para. 25.
142 India's first written submission, paras. 63-65; second written submission, para. 28-29 and 31.
143 In response to a question from the Panel seeking to clarify India's views regarding the complainants'
calculations, India stated that:
[T]he complainants have failed to demonstrate that the alleged FRP/ SAP measures qualify as
market price support in view of paragraph 2 of Annex 3 of the Agreement on Agriculture. In light
of this, the calculations presented by the complainants are untenable and without any basis.
Without delving into any specifics, the complainants ' actual calculations are made based on an
incorrect interpretation of the relevant laws and the challenged measures.
(India's response to Panel question No. 45)
144 Emphasis added.
145 This can be expressed mathematically as: [Market price support = (FERP – AAP) * (QEP)].
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government purchase of the relevant product (i.e. through government expenditure or revenue
foregone). Second, and on th e basis of our interpretation of the term "market price support", we
determine the amount of market price support maintained by India, in accordance with the
methodology set out in paragraph 8 of Annex 3. Third, we address the complainants' references to
certain measures that, in their view, constitute budgetary payments made to maintain the gap
between the FERP and AAP.
7.1.3.2.2 The scope of "market price support"
7.37. The complainants note that Annex 4 of the A greement on Agriculture indicates that "market
price support" is "defined in Annex 3 ".146 They argue that, pursuant to paragraph 8 of Annex 3,
market price support exists when there exists an AAP, there is a gap between the AAP and FERP,
and there is a quantity of production elig ible to receive the AAP .147 The complainants submit that
the AAP refers to a price "determined not by market forces but by administrative action", and is "the
price set by the government at which specified entities will purchase certain basic agricultural
products".148 The complainants argue that the FRP and SAPs constitute AAPs that differ from the
market price and consequently the FRP and SAPs should be included in the calculation of India's AMS
to sugarcane producers, using the methodology prescribed in pa ragraph 8 of Annex 3. 149 The
complainants also argue that, pursuant to Article 6.1 of the Agreement on Agriculture, any domestic
support measure that is not specifically exempted from the calculation of domestic support is subject
to a Member's reduction co mmitments under the A greement on Agriculture.150 The complainants
also refer to other relevant context (including India's Schedule) , the object and purpose of the
Agreement on Agriculture, negotiating history, academic writings, and prior panel reports, all of
which they consider to support their interpretation of the Agreement on Agriculture.151
7.38. India argues that the FRP and SAPs do not constitute market price support under Annex 3.
Specifically, India argues that the term "market price support" in paragraph 1 of Annex 3 identifies
a type of subsidy, in light of the language "any other subsidy" used in that paragraph. 152
Furthermore, according to India's reading of paragraph 2 of Annex 3, a subsidy can only exist where

146 Brazil's second written submission, para. 57; Australia's second written submission, para. 28;
Guatemala's second written submission, para. 43.
147 The complainants note that, under paragraph 8, market price support is equivalent to the difference
between the "applied administered price" (AAP) and the "fixed external reference price" (FERP), multiplied by
the "quantity of eligible production" (QEP). (Brazil's first written submission, para. 99; Australia's first written
submission, para. 114; Guatemala's fi rst written submission, para. 118) Brazil argues that "' market price
support' is a function of the QEP and the 'gap' between an AAP and the FERP. Since the FERP is 'fixed' by historical
data pursuant to paragraph 9 of Annex 3, Members provide 'market price support' when they set an AAP and
eligibility criteria to determine the QEP". (Brazil's opening statement at the first substantive meeting of the Panel,
para. 13) Australia argues that market price support "will exist – or have a measurable value – when there is a
gap between a FERP and an AAP" and "market price support will exist and have a value measurable under
paragraph 8 when a Member sets an AAP that is higher than t he relevant FERP, and determines the production
eligible to receive that AAP". (Australia's opening statement at the first substantive meeting of the Panel, para.
49; second written submission, para. 33) Guatemala states that market price support " exists w henever a
Member: (i) sets an AAP; (ii) determines the quantity of production eligible to receive that AAP; and (iii) there
is a FERP which is lower than the AAP." (Guatemala's second written submission, para. 45 (fns omitted))
148 Brazil's first written submission, para. 101; opening statement at the first substantive meeting of the
Panel, para. 14; Australia's first written submission, paras. 116-118; Guatemala's first written submission, para.
119 (quoting Panel Report, China – Agricultural Producers, para. 7.177). Australia and Guatemala argue that the
AAP does not necessarily entail a price achieved by government expenditures (for instance, through budgetary
payments or procurement), but rather can simply be achieved by administrative action. (Australia's first written
submission, para. 119; Guatemala's first written submission, para. 119 (referring to Panel Report,
Korea - Various Measures on Beef, para. 827))
149 Brazil's first written submission, paras. 135 -139 and 156; Australia's first written submissio n,
paras. 153-156; Guatemala's first written submission, paras. 140-144.
150 Brazil's second written submission, para. 20; Australia's second written submission, para. 39 ;
Guatemala's response to Panel question No. 61, para. 16.
151 See e.g. Brazil's opening statement at the first substantive meeting of the Panel, paras. 8-29; second
written submission, paras. 6-16 and 57-60; opening statement at the second substantive meeting of the Panel,
paras. 13-31; Australia's opening statement at the first substantive meeting of the Panel, paras. 46-54; second
written submission, paras. 31 -84; opening statement at the second substantive meeting of the Panel,
paras. 16-39; Guatemala's opening statement at the first substantive meeting of the Panel, paras. 3.9-3.17;
second written submission, paras. 21 -53; opening statement at the second substantive meeting of the Panel,
paras. 2.13-2.18.
152 India's response to Panel question No. 18(a); closing statement at the first substantive meeting of the
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there is a budgetary outlay or revenue fo regone by governments or their agents. 153 India submits
that the Central and State Governments do not purchase the sugarcane or pay the administered
prices set by the FRP and SAPs.154 Rather, it is private entities (i.e. sugar mills) that do so. Therefore,
the FRP and SAPs do not qualify as market price support, within the meaning of paragraph 1 of
Annex 3 of the Agreement on Agriculture, and should not be included in the calculation o f India's
AMS to sugarcane producers.155 India also contests the relevance of the complainants' additional
arguments relating to context (including India's Schedule) , object and purpose and negotiating
history of the Agreement on Agriculture, and prior panel reports.156
7.39. Certain third parties disagree with India's interpretation of Annex 3. Canada, Japan, and the
United States consider that the use of the word "include" in paragraph 2 of Annex 3 demonstrates
that the list of measures set out in this paragraph is not exhaustive, and measures other than
budgetary outlays and revenue foregone by governments or their agents may also be included in
the calculation of a Member's AMS.157 The European Union argues that the commas and use of the
word "or" in paragraph 1 of Annex 3 indicate that this paragraph identifies three specific forms of
domestic support, which may have different characteristics, and paragraph 2 simply clarifies the
notion of subsidies without suggesting that all forms of domestic support mentioned in paragraph 1
must be subsidies or characterised by budgetary outlays or revenue foregone by governments or
their agents.158
7.40. A number of other third parties take no position on the correct interpretation of Annex 3, but
nevertheless comment on certain asp ects of India's arguments. China argues that India
misrepresents the findings of the panel in China – Agricultural Producers.159 Costa Rica agrees with
India that there is no rule of binding precedent in WTO dispute settlement, but submits that prior
panel reports "may provide valuable guidance in assessing the characterization of the measures in
question".160 El Salvador submits that, since India did not establish any domestic subsidy reduction
commitment in its Schedule, "by virtue of the provisions of Arti cle 6.4 of the Agreement on
Agriculture, the measures in question cannot exceed the de minimis level of 10%".161

153 India's first written submission, para. 62; second written submission, paras. 22-26.
156 India's second written submission, para. 55; opening statement at the second substantive meeting of
the Panel, paras. 6-60.
157 Canada's third-party statement, paras. 5 -7; Canada's third-party submission, paras. 11 -12; Japan's
third-party statement, para. 5; United States' third -party submission, para. 22. Japan also highlights that
Article XVI:1 of the GATT 1994 refers to "any subsidy, including any form of income or price support", which
supports a broad interpretation of market price support, and notes that India's Schedule identifies market price
support on the basis of a fixed purchase price for sugarcane , which contradicts India's argument that the FRP
does not constitute market price support . (Japan's third-party statement, para. 5) The United States considers
that India's interpretation artificially limits the scope of the term "domestic support", as used in the Agreement
on Agriculture, and is contradicted by the methodology to calculate market price support as set out in paragraph
8 of Annex 3. (United States' third-party submission, paras. 23-25)
158 European Union's third -party submission, paras. 46 -47. The European Union also considers that if
Members had intended to limit the scope of their domestic support commitments to subsidies (or budgetary
outlays and revenue foregone) then the Agreement on Agriculture "would simply refer to subsidies to agricultural
products and not use two different expressions such as domestic support and subsidies". (Ibid. para. 43) The
European Union further argues that this interpretation is supported by paragraph 1 of Annex 2 and paragraph 8
of Annex 3 of the Agreement on Agriculture, the object and purpose of the Agreement on Agriculture, and the
findings of prior panels. (Ibid. paras. 44-60; European Union's third-party statement, paras. 4-13)
159 China's third -party statement, paras. 4 -5. China submits that India represents the panel's
interpretation of the term "applied administered price" in China – Agricultural Producers as being influenced by
the context of the case, namely the source of financing for purchase and ownership of the purchased products.
China argues, however, that in that dispute, neither the parties nor the panel raised the source of finance or
ownership of purchased products in interpreting th at term. (Ibid. para. 5) China submits that, to the contrary,
the panel " adopted the ordinary meaning approach presented by both parties, and found that the 'applied
administered price' is the price set by the governmen t at which specified entities will purchase certain basic
agricultural products". (Ibid.) China nevertheless agrees with India that the panel "did not address the question
of what would constitute … 'market price support' or whether the applied administere d price is the sole
prerequisite to a market price support measure". (Ibid. para. 6)
160 Costa Rica's third-party submission, para. 12. Costa Rica also argues that "the characterization of the
FRP/SAP as domestic support measures would depend on different e lements, which if taken together, would
provide the necessary guidance to determine if there has been a violation of … the [Agreement on Agriculture]".
(Ibid. para. 13)
161 El Salvador's third-party submission, p. 9.
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7.41. The difference in the parties' arguments raises the issue of whether market price support,
within the meaning of the Agreement on Agriculture, only exists when the government purchases
(i.e. pays for) the relevant agricultural product. We note at the outset that the plain meaning of the
term "market price support" does not reveal any such limitation. Specifically, the "market price" of
an agricultural product is the price of that product in the market 162, and "price support" refers to
"assistance from a government or other official body in maintaining prices at a certain level
regardless of supply or demand."163 Thus, the concept of market price support, on its face, appears
to refer to any government measures that set and maintain prices at a certain level, independent of
the supply and demand dynamics in the market. This would appear to include measures that set or
maintain mandatory minimum prices payable by private entities.
7.42. Turning to the usage of this term in the Agreement on Agriculture, we recall that the logic of
the Agreement on Agriculture is that any measure that provides support to domestic agricultu ral
producers should be included in the calculation of a Member's AMS unless it is specifically exempted
or otherwise excluded from that calculation, pursuant to a provision of the Agreement on
Agriculture.164 We further understand that a mandatory minimum price for agricultural products,
that is independent of supply and demand in the market, could indeed provide some measure of
support to producers of agricultural products, regardless of whether the price is payable by private
entities or the government. C onceptually, therefore, a mandatory minimum price set by the
government but payable by private entities would seem to constitute "domestic support" to
agricultural producers and would therefore have to be included in the calculation of a Member's AMS.
7.43. We understand India's position to be that such measures are excluded from the calculation of
a Member's AMS by virtue of paragraph 1 of Annex 3, read in light of paragraph 2. In India's view,
these provisions establish that only measures in the form of subsidies (by which India means
measures entailing government expenditure or revenue foregone) can be taken into account in
calculating AMS. India's argument rests on two pillars: (i) pursuant to paragraph 1 of Annex 3,
"market price support" must be in the form of a "subsidy"; and (ii) "subsidies", as defined in
paragraph 2 of Annex 3, must entail some form of government expenditure or revenue foregone.
7.44. The first pillar of India's arguments concerns p aragraph 1 of Annex 3 . This paragraph
indicates, inter alia, that a Member's AMS "shall be calculated on a product -specific basis for each
basic agricultural product receiving market price support, non-exempt direct payments, or any other
subsidy not exempted from the reduction commitment ('other non-exempt policies')." India submits
that the use of the words "any other subsidy" reveals that the preceding measures must also be
subsidies.165 The complainants, however, variously argue that the phrase "any other subsidy" can
be interpreted differently: (i) Australia and Guatemala submit that this language could indicate that
domestic support measures may be, but are not necessarily, in the form of subsidies 166; (ii) Brazil
and Guatemala consider that this language could indicate that the second and third categories of
domestic support identified in paragraph 1, namely non -exempt direct payments and other
non-exempt policies, are subsidies167; and finally, Guatemala submits that this language could even
refer exclusively to the third category of domestic support, namely "other non-exempt policies".168
7.45. Based on the text of paragraph 1, we consider that a number of the interpretations put forward
by the parties are plausible. We recognize that the phrase "any other subsidy" in paragraph 1 can
be understood to suggest that all three types of measures (market price support, non-exempt direct
payments, and other non-exempt policies) are "subsidies".169 At the same time, it is equally plausible

162 The term "market price" is defined as "[t]he current price asked for a product, commodity, or service
in a particular market". (Oxford English Dictionary online, definition of "market price, n."
https://www.oed.com/view/Entry/247700 (accessed 22 July 2021))
163 Oxford English Dictionary online, definition of "price support, n."
https://www.oed.com/view/Entry/151135 (accessed 22 July 2021).
164 See paragraphs 7.21 to 7.26 above.
165 India's second written submission, para. 18. See also India's response to Panel question No. 18(a).
166 Australia's opening statement at the first substantive meeting, para. 43; Guatemala's second written
submission, para. 35.
167 Brazil's opening statement at the second substantive meeting, paras. 17-18; Guatemala's second
written submission, para. 37.
168 Guatemala's second written submission, para. 36.
169 We are aware that the panel in US – Upland Cotton concluded "that all relevant types of support for
the purposes of the Agreement on Agriculture are subsidies". (Panel Report, US – Upland Cotton, para. 7.422)
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that the phrase "any other subsidy" merely identifies the "non-exempt direct payments" and "other
non-exempt policies" as subsidies. Based on its text and syntax, we consider that paragraph 1 does
not clarify whether market price support is a "subsidy".170
7.46. Proceeding to the second pillar of India's argument, concerning paragraph 2 of Annex 3, we
note that this paragraph states that "[s] ubsidies under paragraph 1 shall include both budgetary
outlays and revenue foregone by governments or their ag ents." India submits that the words
"include both" limit the defined universe of subsidies to budgetary outlays and revenue foregone.171
India argues that otherwise the term "both" would be redundant. 172 Alternatively, assuming that
paragraph 2 contains a non-exhaustive list, India argues that subsidies as defined in paragraph 2
should at least have the same "characteristics of governmental expenditure or expense from a public
account", because an unlisted type of subsidy must share a "commonality" with th e s ubsidies
specifically listed in paragraph 2. 173 The complainants submit that the term "shall include" merely
indicates that subsidies include, but are not limited to, budgetary outlays and revenue foregone.174
They point to the ordinary meaning of the term "include" and submit that the word "both" is not
redundant, but rather emphasizes the inclusion of the measures specifically identified.175 In addition,
Brazil and Guatemala see no basis to presume that other types of subsidies must share a
commonality in the form of government expenditure.176
7.47. In our view, a textual analysis of paragraph 2 is inconclusive. On the one hand, we agree with
India that there are instances of usage where the words "includes both" can be understood to mean
"limited to".177 On the other hand, we also agree with the complainants that the word "both" can
function as a signifier of emphasis rather than exclusion, such that the phrase "includes both" is not
necessarily synonymous with "includes only". 178 In our view, the significance o f the word "both",

We note, however, that this finding constituted an obiter dicta observation and the panel itself concluded that it
was "inappropriate" and "unnecessary" to give "an exhaustive definition of 'support'". (Ibid. para. 7.423) We do
not consider that the observations of the panel in US – Upland Cotton relieve us from our duty to make an
objective assessment of the matter before us in the present dispute, and we therefore address the parties'
interpretative arguments on their merits.
170 This analysis also holds for the Spanish and French versions of the text, which refer, respectively, to
"sostenimiento de los precios del mercado, de pagos directos no exentos o de cualquier otra subvención no
exenta del compromiso de reducción" and "soutien des prix du marché, de versements directs non exemptés, ou
de toute autre subvention qui n'est pas exemptée de l'engagement de réduction".
171 India's closing statement at the first substantive meeting of the Panel, para . 27 ; second written
submission, para. 22.
172 India's closing statement at the first substantive meeting of the Panel, para. 27. India adds that, while
the term "include" may indicate a non -exhaustive list, when it is followed by the term "both", it loses that
function. (India's second written submission, para. 22)
173 India's second written submission, paras. 25 and 42.
174 Brazil's opening statement at the first substantive meeting of the Panel, para. 32; Australia's opening
statement at the first substantive meeting of the Panel, para. 45; Australia's second written submission,
paras. 59-61; Guatemala's opening statement at the first substantive meeting of the Panel, para. 3.8.
175 Brazil's opening statement at the second substantive meeting of the Panel, para. 22; Australia's
opening statement at the second substantive meeting of the Panel, para. 31; Guatemala's opening statement at
the second substantive meeting of the Panel, para. 2.9. As an example of such usage, the complainants submit
that the sentence "the food at the buffet shall include both soup and pasta" does not imply that only soup and
pasta are available at the buffet . (Brazil's opening statement at the second meeting of the Panel, para. 25;
Australia's closing statement at the first substantive meeting of the Panel, para. 17; Guatemala's second written
submission, para. 20)
176 Brazil's opening statement at the second meeting of the Panel, para. 26; Guatemala's opening
statement at the second substantive meeting of the Panel, para. 2.11. Guatemala notes that the relevant
commonality shared by subsidies is "that the measure provides support in favour of agricultural producers and
that this support can be expressed in monetary terms ". ( Guatemala's opening statement at the second
substantive meeting of the Panel, para. 2.11 ) Australia, for its part , argues that the negotiating history of the
Agreement on Agriculture reveals that "[t] here is no suggestion that the negotiators sought to limit domestic
support to subsidies. On the contrary, during the negotiations, market price support was conceptualis ed as
'including any measure … which acts to maintain producer prices at levels above those prevailing in international
trade for the same or comparable products '". (Australia's second written submission, para. 66 (quoting
Chairman's Note on Options in the Agricultural Negotiations, MTN.GNG/AG/W/1/Add.4 (Exhibit JE-156), para. 4))
177 This makes sense in circumstances where the universe of things being described consists exclusively
of two things, such as India argues is the case here. An example of such usage would be a sentence indicating
that "the chemical composition of water includes both hydrogen and oxygen".
178 See e.g. Oxford English Dictionary online, "both, pron., adv., and adj."
https://www.oed.com/view/Entry/21867 (accessed 22 July 2021). This would be appropriate in circumstances
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where it follows the words "include" or "includes", depends on whether the universe of things being
described is limited to the things identified in the sentence. In the present proceedings, the very
issue we are asked to resolve is whether the two listed items in paragraph 2 represent the complete
universe of subsidies (within the meaning of the Agreement on Agriculture). Thus, by relying on the
word "both" to define the universe of "subsidies", India's argument seems to put the cart before the
horse.179 We therefore do not consider that, on its face, paragraph 2 limits the scope of subsidies to
"budgetary outlays" and "revenue foregone".
7.48. We are also unpersuaded by India's argument that, even if paragraph 2 is merely indicative,
it nevert heless necessarily means that "subsidies" must share a commonality with "budgetary
outlays" and "revenue foregone" in the form of "government expenditure". 180 If the drafters had
intended for such a limitation to appear, they would probably have set it fort h explicitly. We note
India's contextual argument that "[t]he usage of the phrases 'by virtue of governmental action' and
'whether or not a charge on the public account is involved' in [Article 9.1(c) of the Agreement on
Agriculture] … and the deliberate omission of such wide language in [paragraph 2 of Annex 3] clearly
establishes that paragraph 2 of Annex 3 does not include private expenditures." 181 We note,
however, that Article 9.1(c) refers exclusively to "payments … that are financed by virtue of
governmental action".182 We are therefore not convinced that this language is as "wide" as India
assumes. Furthermore, the language of Article 9.1(c) does not, in our view, clarify whether the
subsidies referred to in paragraph 2 of Annex 3 must exclusively be i n the form of government
expenditure or revenue foregone.
7.49. We note, at this juncture, that India has failed to identify any provision that , on its face,
unambiguously limits the scope of market price support to measures entailing government purchases
of the relevant agricultural product (i.e. through government expenditure or revenue foregone) .
Rather, both pillars of India's interpretation are premised on language that can easily be interpreted
differently. In this regard, we observe that, in contrast to the ambiguities of paragraphs 1 and 2 of
Annex 3, other provisions of the Agreement on Agriculture that exclude certain domestic support
measures from the scope of Members' reduction commitments do so clearly and explicitly
(e.g. Articles 6.2, 6.4, and 6.5, and Annex 2).
7.50. While India's interpretation of the scope of the term "market price support" focuses on
paragraphs 1 and 2 of Annex 3, we also consider it pertinent that these are not the only provisions
of the Agreement on Agriculture that refer to market price support. Importantly, paragraph 8 of
Annex 3 sets out the methodology to quantify the amount of market price support that a Member
provides. Under paragraph 8, "market price support shall be calculated using the gap between a
fixed ex ternal reference price and the applied administered price multiplied by the quantity of

where the universe of items is larger than the two items identified and the inclusion of the two items identified
is surprising or noteworthy. For instance, one might say that "visitors to theme parks include both children and
the elderly". We note that such usage is more natural with the use of the word "may", as in "X may include both
Y and Z". We nevertheless note that additional ambiguities can arise from the use of the word "may", and
consequently the use of the word "shall" instead of "may" in paragraph 2 is not determinative as to the intended
significance of the words "include both".
179 In our view, the French and Spanish versions of the text are also not definitive. The French version
states that "[l]es subventions visées au paragraphe 1 comprendront à la fois les dépenses budgétaires et les
recettes sacrifiées par les pouvoirs publics ou leurs agents." The definition of "comprendre" includes "[i]nclur e,
faire entrer dans un ensemble". (Dictionnaire de l’Académie française, 9e édition (actuelle), definition of
"comprendre" https://www.dictionnaire-academie.fr/article/A9C3297 (accessed 22 July 2021)) The Spanish text
states that "[l]as subvenciones a que se refiere el párrafo 1 comprenderán tanto los desembolsos presupuestarios
is defined as "[c]ontener o incluir en sí algo." (Real Academia Española, definition of "comprender"
https://dle.rae.es/comprender?m=form (accessed 22 July 2021)) We observe that the French and Spanish verbs
"comprendre" and "comprender" arguably correspond more closely to the English words "comprise" or "consist
of" than to "include". We also note, however, that a synonym of "comprise" is "include", which ultimately returns
us to the same in terpretative difficulties we face with the English version. (Oxford English Dictionary online,
definition of "comprise, v." https://www.oed.com/view/Entry/37893 (accessed 22 July 2021))
180 See e.g. India's second written submission, paras. 25 and 42.
181 India's opening statement at the second substantive meeting of the Panel, para. 16. (underlining
omitted)
182 Article 9.1(c) states that export subsidies subject to Members' reduction commitments include:
"payments on the export of an agricultural product that are financed by virtue of governmental action, whether
or not a charge on the public account is involved, including payments that are financed from the proceeds of a
levy imposed on the agricultural product concerned or on an agricultural product from which the exported product
is derived".
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production eligible to receive the applied administered price." Furthermore, "[b]udgetary payments
made to maintain this gap, such as buying-in or storage costs, shall not be included in the AMS."
7.51. We note India's argument that paragraph 8 concerns the calculation of market price support
whereas paragraphs 1 and 2 concern the existence of market price support. 183 We are cognizant
that, on its face, paragraph 8 explains the calculation methodology for market price support, rather
than providing a definition per se. In our view, however, by identifying the constituent elements of
market price support (i.e. the FERP, AAP, and QEP), the calculation methodology set out in
paragraph 8 also provides a definition for market price support. We therefore find it unsurprising
that Annex 4 of the Agreement on Agriculture refers to market price support "as defined" in Annex 3.
We see no provision in Annex 3, or elsewhere in the Agreement on Agriculture, other than
paragraph 8, that can be said to define market price support. We therefore consider paragraph 8 to
be highly pertinent to our examination of whether market price support can only exist where the
government purchases or procures t he agricultural product. Moreover, even if India were correct
that paragraph 8 merely sets forth a calculation methodology, since it is one of the few provisions
in the Agreement on Agriculture that refers to "market price support", and contains a rather detailed
methodology for its calculation, we consider this provision to be highly relevant to our interpretation
of the term "market price support".
7.52. We therefore find that , by defining market price support, paragraph 8 describes the
circumstances in which market price support can be said to exist.184 Paragraph 8 refers to situations
where an AAP differs from the FERP, and there is a quantity of production eligible to receive that
AAP. We note that the word "applied" means "put to practical use".185 The word "administered" can
mean "managed, controlled, effected, kept running".186 More specifically in the economic sense, and
in particular in relation to a price or interest rate, "administered" is defined as "determined not by
market forces but by administrative action (as of a large company or a government)".187 The "applied
administered price" therefore refers to a price for agricultural products that is determined by the
administrative action of the government and not by market forces.188 It follows that if an AAP that
differs from the FERP can be shown to exist, then market price support can be said to exist, within
the meaning of the Agreement on Agriculture, provided that there is domestic production that is
eligible to receive that AAP. Under this interpretation of the Agreement on Agriculture, market price
support could potentially exist in situations where the government does not purchase the relevant
product.
7.53. We further observe that the application of the methodology set out in paragraph 8 entails a
relatively complex process of determining the amounts of each component (i.e. AAP, FERP, and QEP)
and applying the formula. We note that the quantity of production " eligible" to receive the AAP is
not necessarily the same as the quantity of production t hat actually receives that price. 189
Furthermore, under the second sentence of paragraph 8, "budgetary payments" made to maintain
the gap between the AAP and the FERP are not to be taken into account in quantifying the amount
of market price support that a Member provides. It is therefore clear to us that paragraph 8 sets out
a methodology for calculating market price support that is divorced from any expenditure incurred

183 India's response to Panel question Nos. 48(a) and (b).
184 We note in particular that Annex 4 of the Agreement on Agriculture sets forth a methodology to
calculate an "equivalent measurement of support" for market price support in situations " where market price
support as defined in Annex 3 exists but for which calculation of this component of the AMS is not practicable ".
(emphasis added) This indicates that the "existence" of market price support is based on the "definition"
appearing in Annex 3 and, as explained, the only definition of market price support in Annex 3 is to be found in
paragraph 8.
185 Oxford English Dictionary online, definition of "a pplied, adj." https://www.oed.com/view/Entry/9713
(accessed 22 July 2021). See also Panel Report, China – Agricultural Producers, para. 7.177.
186 Oxford English Dictionary online, definition of "administered, adj"
https://www.oed.com/view/Entry/2532 (accessed 22 July 2021).
187 Oxford English Dictionary online, definition of "administered, adj"
https://www.oed.com/view/Entry/2532 (accessed 22 July 2021) . See also Panel Report, China – Agricultural
Producers, para. 7.177.
188 In China – Agricultural Producers , the panel c oncluded that "[t]he AAP … is the price set by the
government at which specified entities will purchase certain basic agricultural products". (Panel Report,
China - Agricultural Producers, para. 7.177)
189 See e.g. Panel Reports, Korea – Various Measures on Beef, para. 831; China – Agricultural Producers,
para. 7.296; and Appellate Body Report, Korea – Various Measures on Beef, para. 120.
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by the government in maintaining that market price support, let alone requires that the government
should pay the AAP.
7.54. We find India's interpretation of the scope of market price support to be difficult to reconcile
with the definition of, and methodology for calculating, market price support, as set out in
paragraph 8. As a matter of first impression, the very distinction between "budgetary payments
made to maintain the [price] gap" and the calculation of the amount of the market price support
suggests the possibility that market price support could be maintained through means other than
government expenditure. Moreover, it would be inconsistent, in our view, if the drafters of the
Agreement on Agriculture had required that market price support only exist in situations of
government expenditure/revenue foregone, yet stipulated a methodology f or quantifying market
price support that not only does not rely on the amounts of that government expenditure/revenue
foregone, but specifically excludes such amounts from the calculation and sets forth a relatively
complex process of identifying and quant ifying various components for purposes of applying a
formula.
7.55. We further note that the calculation methodologies set out in Annex 3 for quantifying
"non-exempt direct payments" and "other non -exempt policies" specifically indicate that such
measures can b e quantified using "budgetary outlays". 190 Thus, in the case of quantifying
non-exempt direct payments or other non -exempt measures, the Agreement on Agriculture
establishes that budgetary outlays, among other approaches, may be used in the first instance 191
without necessarily assessing the practicability of any alternative methodologies. It stands to reason
that if market price support only came into existence in situations where a government purchases
the agricultural product (i.e. through government expen diture or revenue foregone), then the
Agreement on Agriculture would similarly set out a hierarchically equivalent calculation methodology
based on budgetary outlays rather than first requiring the application of a methodology based on an
AAP, FERP, and QEP.192 The fact that it does not do so strongly suggests that market price support
can exist even in the absence of government expenditure or revenue foregone.
7.56. Having exhausted our rev iew of references to market price support in the Agreement on
Agriculture, we turn to other relevant context for interpreting the scope of this concept. We note, in
this respect, that Article 6.2 of the A greement on Agriculture excludes from Members' reduc tion
commitments " government measures of assistance, whether direct or indirect, to encourage
agricultural and rural development ". The explicit exclusion of such measures suggests that, in the
absence of that exclusion, such measures would have been subjec t to reduction commitments. In
our view, this demonstrates that a potentially broad scope of measures, both direct and indirect,
constitute "domestic support" measures subject to reduction commitments, for purposes of the
Agreement on Agriculture.
7.57. We also note that t he preamble to the Agreement on Agriculture indicates that one of its
long-term objectives is to correct and prevent distortions in agricultural markets, including through
substantial progressive reductions in agricultural support and protection . It is, inter alia, for this
reason that Members have undertaken certain domestic support commitments, as reflected in
Article 7 of the Agreement on Agriculture. To the extent that a government applies an administered
price for an agricultural product, different from the market price, this would appear to be a distortion
of the market regardless of whether the government pays that price itself or mandates others to do
so. Moreover, it stands to reason that if Members had wished to exclude a subset of marke t

190 Paragraphs 10-12 of Annex 3 to the Agreement on Agriculture concern the calculation of non-exempt
direct payments, and indicate that " non-exempt direct payments which are dependent on a price gap shall be
calculated either using the gap between the fixed reference price and the applied administered price multiplied
by the quantity of production eligible to recei ve the administered price, or using budgetary outlays " and
"[n]on-exempt direct payments which are based on factors other than price shall be measured using budgetary
outlays". (emphasis added) Paragraph 13 of Annex 3, concerning other non -exempt measures, indicates that
"the value of such measures shall be measured using government budgetary outlays or, where the use of
budgetary outlays does not reflect the full extent of the subsidy concerned, the basis for calculating the subsidy
shall be the gap betwee n the price of the subsidized good or service and a representative market price for a
similar good or service multiplied by the quantity of the good or service". (emphasis added)
191 Paragraphs 10-13 of Annex 3 of the Agreement on Agriculture indicate that, for purposes of
quantifying either of these types of measures, other methodological approaches are hierarchically equivalent to
a budgetary outlay approach.
192 Under paragraphs 1 and 2 of Annex 4, a budgetary outlay methodology for calculating market price
support is contemplated only in the event that it is not practicable to apply the methodology in paragraph 8 of
Annex 3 and it is not practicable to calculate the amount of market price support using just the AAP and QEP.
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distortions (such as distortions in the form of mandatory minimum prices set by the government but
payable by private entities) from the scope of Members' reduction commitments, they would
probably have done so explicitly, as they did with other types of exclusions. We therefore understand
that it is consistent with the object and purpose of the Agreement on Agriculture to interpret market
price support as covering measures that entail price support in the form of mandatory minimum
prices payable by priva te entities. Furthermore, limiting the scope of market price support to
measures entailing purchases of the relevant product by the government would seem to undermine
this important objective of the Agreement on Agriculture, as well as the object and purpose of those
provisions (such as Article 7.2(b)) governing Members' domestic support commitments.
7.58. To summarize our analysis above, we recall that the plain meaning of "market price support"
seems to include mandatory minimum prices fixed by the government but payable by private
entities. When applied to agricultural products, such measures would also appear to constitute
"domestic support measures" within the meaning of the Agreement on Agriculture. We have
addressed India's arguments that such measures are excluded from the calculation of a Member's
AMS through paragraphs 1 and 2 of Annex 3. In our view, these paragraphs do not, on their face,
impose any such limitation. While noting the ambiguities in the texts of those paragraphs, we in any
event consider that paragraph 8 of Annex 3 defines market price support, and does so in a way that
suggests that mandatory minimum prices fixed by the government but payable by private entities
could indeed constitute market price support within the meaning of the Agree ment on Agriculture.
We also note that India's interpretation of market price support would render the calculation
methodology set out in paragraph 8 absurd. Finally, we note that Article 6.2 of the Agreement on
Agriculture suggests a broad scope of measur es that can constitute domestic support, and we
consider that limiting the scope of market price support to measures requiring governmental
purchase of the agricultural product would seem to undermine the object and purpose of the
Agreement on Agriculture.
7.59. On the basis of the foregoing, we find that market price support, within the meaning of the
Agreement on Agriculture, does not require that the government purchase (i.e. through government
expenditure or revenue foregone) the relevant agricultural produc t. We also find that market price
support is defined in paragraph 8 of Annex 3, and can be said to exist when an AAP for a basic
agricultural product differs from the FERP, provided that there is domestic production that is eligible
to receive that AAP. In coming to this conclusion, we do not consider it necessary to resolve the
textual ambiguities of paragraphs 1 and 2 of Annex 3. In our view, regardless of these ambiguities,
the Agreement on Agriculture is clear that market price support does not require government
procurement of or payment for the relevant agricultural product. It is therefore unnecessary for us
to express a view on whether paragraph 1 define s market price support as a subsidy or whether
paragraph 2 extends the scope of subsidies beyond measures requiring government expenditure.
7.60. We also wish to note that our foregoing interpretation is consistent with the interpretation
relied upon by India itself in concluding its Schedule. Specifically, India's Schedule contains
calculations of market pr ice support for the years 1986 -88 on the basis of a measure that fixed a
minimum price for sugarcane that was payable by private entities, and not the government.193 India
argues that, "[i] f a Member's Schedule is relied upon to interpret the meaning of 'market price
support'…, this will lead to a situation where there will be multiple meanings of the same terminology
under the [Agreement on Agriculture] depending upon the Schedule of a Member." 194 India also
refers195 to a statement by the Appellate Body t hat "[t]he Schedule of one Member, and even the
scheduling practice of a number of Members, is not relevant in interpreting the meaning of a treaty
provision, unless that practice amounts to 'subsequent practice in the application of the treaty' within
the meaning of Article 31(3)(b) of the Vienna Convention."196 We observe that Members' Schedules
have, in the past, been used by panels and the Appellate Body to interpret Members' substantive
obligations, on the basis that the Schedules constitute part of the covered agreements.197 We also
note that neither India nor any other party has pointed to any Schedule that evinces an alternative
interpretation of market price support. We do not consider it necessary to address, as a general
matter, the relevance of Members' Schedules in interpreting the covered agreements. It suffices, for

193 G/AG/AGST/IND, p. 28; Sugarcane (Control) Order 1966 (prior to 2009), (Exhibit JE-148), Clause 3(1).
194 India's second written submission, para. 50.
195 India's opening statement at the second substantive meeting of the Panel, para. 54.
196 Appellate Body Report, Chile - Price Band System, para. 272.
197 See e.g. Appellate Body Report, US – Gambling, para. 182; Panel Report, China – Agricultural
Producers, para. 7.263.
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our purposes, to note that India's Schedule was concluded on the basis of the same interpretation
as our own, and there is no indication that any Member's Schedule contradicts that interpretation.
7.61. We further note that our interpretation of market price support within the meaning of the
Agreement on Agriculture is consistent with prior panel reports. In Korea – Various Measures on
Beef, the panel pointed out that " the quantification of market price support in AMS terms is not
based on expenditures by government. Market price support as defined in Annex 3 can exist even
where there are no budgetary payments." 198 The panel in China – Agricultural Producers similarly
found that the AAP " is the price set by the government at which specified entities will purchase
certain basic agricultural products".199 We note India's arguments that the findings of these panels
are not relevant to the present disputes.200 For the purpose of resolving the present disputes, we do
not consider it necessary to address as a general matter the precedential value of prior panel or
Appellate Body reports. We simply note that the panels in Korea – Various Measures on Beef and
China – Agricultural Producers interpreted the term "market price support" as we do in this report.
7.1.3.2.3 India's market price support to sugarcane producers
7.62. We recall that, under paragraph 8 of Annex 3 of the Agreement on Agriculture, "market price
support shall be calculated using the gap between a fixed external reference price [FERP] and the
applied administered price [AAP] multiplied by the quantity of production eligible [QEP] to receive
the applied administered price". The determination of India's AMS to sugarcane producers for each
season from 2014-15 to 2018-19 requires the application of this methodology.
7.63. In accordance with that approach, the complainants have adduced evidence and
argumentation regarding the relevant FERP, AAP, and QEP, and submitted calculations of India's
market price support to sugarcane producers, for each season from 2014-15 to 2018-19.201
7.64. India does not contest the accuracy of the data or other evidence adduced by the
complainants, nor does India contest the accuracy of the complainants' calculations based on that
data and evidence. India maintains, however, that the burden is on the complainants to establish
that India is acting inconsistently w ith Article 7.2(b), and that India's silence regarding the
complainants' evidence and calculations should not be construed as agreement or assent.202
7.65. We have closely scrutinized the evidence and data adduced by the complainants, as well as
the complainants' calculations. In light of the complexity and level of detail of the complainants'
evidence and calculations, we provide a detailed description of our review in the Appendix to this
Report. Our findings set out in the Appendix constitute an integral part of this Report.
7.66. As explained in greater detail in the Appendix, we consider that the complainants have
sufficiently demonstrated that the FRP and SAPs do indeed constitute AAPs within the meaning of
paragraph 8 of Annex 3. Moreover, we consider that the co mplainants have provided sufficient
evidence to determine the FERP and QEP for each season from 2014 -15 to 2018-19. We therefore
consider that the complainants have adequately met their burden of demonstrating the existence of
market price support, as well as the amount of that market price support, for each sugar season
from 2014-15 to 2018-19.
7.67. For the reasons set out in full in the Appendix, we find that the total amount of market price
support to sugarcane producers maintained by India in each sugar season from 2014-15 to 2018-19
was as follows:

198 Panel Report, Korea – Various Measures on Beef, para. 827.
199 Panel Report, China – Agricultural Producers, para. 7.177. (emphasis added)
200 India argues that: there is no rule of binding precedent in WTO dispute settlement; the ruling of a WTO
panel is based on the facts and issues presented before it and does not have any precedential value; neither of
these panel reports addressed "the issue that is central to the present disputes i.e. what constitutes market price
support or when a market price support can be said to exist within the meaning of Annex 3"; and in all previous
instances where panels have adjudicated issues pertaining to market price support, the market price support
measures involved government purchases of the agricultural product in question. (India's first written
submission, paras. 66-79; closing statement at the first substantive meeting of the Panel, paras. 35-36; second
written submission, para. 30)
201 See Appendix to the Panel Report.
202 India's responses to questioning at the first substantive meeting of the Panel.
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Sugar season Market price support (INR million)
2014-15 903,750.80
2015-16 880,418.99
2016-17 815,045.69
2017-18 1,072,685.61
2018-19 1,110,085.53

7.68. In section 7.1.4 below, we assess whether India's AMS to sugarcane producers, including its
market price support, was in excess of the permitted amount.
7.1.3.2.4 Budgetary payments made to maintain the price gap
7.69. We recall that, under the methodology set out in paragraph 8 of Annex 3 of the Agreement
on Agriculture, "[b]udgetary payments made to maintain [the gap between the FERP and the AAP],
such as buying-in or storage costs, shall not be included in the AMS." The inclusion of this language
in paragraph 8 indicates that: (i) certain measures may be adopted by Members to maintain the gap
between the AAP and the FERP (for example, buying -in or storage costs, or other measures to
facilitate, or enable, the operation of the AAP) ; and (ii) such measures should not be taken into
account when quantifying the amount of market price support provided by the Member, to the extent
that the application of the methodology articulated in the first sentence of paragraph 8 is practicable.
7.70. The complainants identif y a number of measures that, in their view, constitute "budgetary
payments made to maintain" India's market price support.203 Specifically, although the complainants
do not include these measures i n their quantification of India's market price support, they submit
that these are measures through which India provides domestic support to sugarcane producers.204
Australia requests that we explicitly identify these measures as "measures through which India is
providing market price support above de minimis".205
7.71. India does not comment on Australia's request or the complainants' characterization of these
measures.
7.72. We recall that the assessment of whether India is acting inconsistently with Article 7.2(b)
entails a comparison between the amount of domestic support for sugarcane producers that India is
permitted to provide, and the amount of domestic support to sugarcane producers that India actually
provides. In determining the amount of domestic support actually provided by India, the rules in the
Agreement on Agriculture make clear that market price support should be included in the calculation,
but budgetary paymen ts made to maintain that market price support (i.e. to maintain the gap
between the AAP and FERP) should not be taken into account. Consequently, in examining whether
India is acting inconsistently with Article 7.2(b), i t is not necessary for us to make the findings
requested by Australia.
7.73. To the extent that Australia is concerned that our findings with regard to Article 7.2(b) might
be read as not covering all relevant measures through which India maintains market price support206,
we wish to emphasize t hat, for India to be in compliance with Article 7.2(b), the total amount of
non-exempt product-specific domestic support provided to sugarcane producers must not exceed
10% of the total value of sugarcane production in a given season. If India were to eliminate aspects
of its market price support regime while continuing to provide budgetary payments that previously
maintained the gap between the FERP and the AAP, it might well be that such budgetary payments
would, in the absence of a mandatory minimum pric e, constitute domestic support to sugarcane
producers that would be included in the calculation of India's AMS to sugarcane producers. We do

203 Brazil's first written submission, paras. 161 -162 and Appendix A (stating that "the programs listed in
Appendix A may be direct payments made to maintain the price gap, within the meaning of paragraph 8"
(emphasis added)); Australia's first written submission, paras. 181 -185 and Annexes A, B, C, D -2, D-3 and E;
Guatemala's first written submission, paras. 87-96 and 166-168.
204 Brazil's first written submission, paras. 161-162; Australia's first written submission, paras. 185-186;
Guatemala's first written submission, para. 167.
205 Australia's first written submission, para. 186.
206 Australia states that, "[i]f the amount of market price support is inconsistent with India's obligations,
then all the measures through which the price 'gap' has been or is being achieved (and that are identified in the
relevant panel request) should be covered by the Panel's findings as to whether im permissible levels of
non-exempt domestic support have been provided in certain years through the acts or omissions of a Member."
(Australia's response to Panel question No. 20(b), para. 50)
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not, however, consider it necessary in the present proceedings to identify measures which, it is
uncontested, should not be taken into account in calculating India's AMS to sugarcane producers
during the sugar seasons 2014-15 to 2018-19.
7.1.3.3 Non-exempt direct payments and other non-exempt policies
7.1.3.3.1 Overview
7.74. In addition to their assertions regarding India's alleged market p rice support, the
complainants submit that a number of State Governments in India maintain other forms of
non-exempt product-specific domestic support to sugarcane producers, which must also be included
in the calculation of India's AMS to sugarcane produc ers. Specifically, the complainants identify
payments or policies allegedly maintained by three States in India, namely, Tamil Nadu, Andhra
Pradesh, and Karnataka, during certain of the sugar seasons from 2014-15 to 2018-19.207 According
to the complainants, these three States provide domestic support to sugarcane producers in the
form of "non -exempt direct payments" or "other subsidies not exempted from the reduction
commitment ('other non-exempt policies')", within the meaning of paragraph 1 of Annex 3 to the
Agreement on Agriculture.208 In the complainants' view, none of the alleged direct payments or other
policies are exempt under any provision of the Agreement on Agriculture 209 and therefore they
should be included in the cal culation of India's AMS to sugarcane producers .210 Moreover, t he
complainants consider that the State-level support is provided in addition to the Central and State
Governments' provision of market price support, thus differentiating it from the measures that are
excluded from the calculation of India's AMS because they constitute "budgetary payments made to
maintain" a gap within the meaning of paragraph 8 of Annex 3.211
7.75. India argues that, without prejudice to the complainants' characterization of India's al leged
non-exempt direct payments or other non-exempt policies, the complainants "have not provided any
evidence/calculation as to how the total support under these other alleged domestic support
measures (i.e. other than the alleged support under FRP/SAP m easures) exceeds the de minimis
limit applicable to India".212
7.76. Our understanding of the rules in the Agreement on Agriculture regarding the calculation of a
Member's AMS is set out in section 7.1.3.1 above. To recall, the Agreement on Agriculture prescribes
that any measure by a Member that provides support to its agricultural producers should, in
principle, be included in the calculation of a Member's AMS unless that measure is shown to be
exempted, or otherwise excluded, from that calculation under the Agreement on Agriculture. We
further recall that, pursuant to paragraph 1 of Annex 3 of the Agreement on Agriculture,
"non-exempt direct payments" and "other non-exempt policies" are to be included in the calculation
of a Member's AMS.
7.77. We note, in this respect, that India has not argued that any of the payments or policies
allegedly maintained by Tamil Nadu, Andhra Pradesh, and Karnataka are exempt or otherwise
excluded from the calculation of India's AMS to sugarcane producers. We therefore understand that
India's main argument with respect to these alleged State-level payments and policies is that the
complainants have failed to demonstrate that the alleged amounts provided thereunder exceed the

207 See e.g. Brazil's first written submission, para. 163 and Appendix B; Australia's first written submission,
paras. 190 -194, 195 -197, 198-203, Annexes E -1, E -5 and E -8; Guatemala's first written submission,
paras. 170-175, 176-179, 180-185, and Table 12(Rev.) Following the second substantive meeting of the Panel,
Guatemala withdrew its assertions regarding Karnataka's alleged payments and omitted the alleged amounts
from its calculations of India's AMS. (Guatemala's comments on India's response to Guatemala's question No. 3)
208 See e.g. Brazil's first written submission , para. 163; Australia's first written submission, para. 189;
Guatemala's first written submission, paras. 167-169 and Table 12(Rev.)
209 Specifically referring to Articles 6.2, 6.5, and Annex 2 of the Agreement on Agriculture.
210 Brazil's first written submission, para. 163; Australia's first written submission, para s. 193, 197, and
202; Guatemala's first written submission, paras. 172, 177, and 182.
211 Brazil's first written submission, para. 163 ; Australia's first written submission, paras. 193, 197, and
202; Guatemala's first written submission, paras. 173, 177 , and 181. To recall, paragraph 8 of Annex 3 states
that "[b]udgetary payments made to maintain [the gap between the FERP and the AAP], s uch as buying-in or
storage costs, shall not be included in the AMS." (See section 7.1.3.2.4 above)
212 India's first written submission, paras. 81-83; second written submission, para. 6.
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de minimis level of product-specific support that India is permitted to provide to sugarcane
producers, pursuant to Article 7.2(b) of the Agreement on Agriculture.213
7.78. We are aware of t he complainants' argument that, since India exceeds the applicable de
minimis level through market price support alone, it may not be necessary for us to include the
alleged State-level payments or policies in the calculation of India's AMS to sugarcane producers.214
The complainants maintain, however, that regardless of whether we include the payments or polices
in the calculation, India's compliance obligations with respect to Article 7.2(b) of the Agreement on
Agriculture would encompass all non-exempt product-specific domestic support maintained by
India.215 We note that the complainants assert the existence of the three State-level measures at
issue and argue that, together with market price support, such measures contribute to India's
alleged violation of its obligation under Article 7.2(b). According to paragraph 1 of Annex 3 of the
Agreement on Agriculture, measures in the form of non -exempt direct payments and other
non-exempt policies must, in principle, be taken into account in calculating a Member's
product-specific AMS. We see such measures as being different from measures such as budgetary
payments made to maintain market price support, which, pursuant to paragraph 8 of Annex 3,
should not be included in that calculation.216 On this basis, we consider it appropriate to address the
complainants' arguments regarding the alleged non-exempt direct payments and other non-exempt
policies in favour of sugarcane producers in the States of Tamil Nadu, Andhra Pradesh, and
Karnataka, in order to secure a positive solution to these disputes.
7.79. With respect to the precise calculation methodologies for "non-exempt direct payments" and
"other non-exempt policies", the complainants assert that the Panel may use the "budgetary outlay"
approach pursuant to paragraphs 10 to 13 of Annex 3 of the Agreement on Agriculture. 217 In the
complainants' view, this approach is appropriate for the calc ulation of either form of domes tic
support.218 India does not contest the use of the "budgetary outlay" approach to quantify the alleged
State-level support.219
7.80. Paragraphs 10 to 12 of Annex 3 of the Agreement on Agriculture contain rules for quantifying
the level of domestic support provided through "non-exempt direct payments":
10. Non-exempt direct payments: non-exempt direct payments which are dependent
on a price gap shall be calculated either using the gap between the fixed reference price
and the applied administered price multiplied by the quantity of production eligible to
receive the administered price, or using budgetary outlays.
11. The fixed reference price shall be based on the years 1986 to 1988 and shall
generally be the actual price used for determining payment rates.
12. Non-exempt direct payments which are based on factors other than price shall be
measured using budgetary outlays.
7.81. Regarding the quantification of "other non -exempt policies", p aragraph 13 of Annex 3
provides:
13. Other non-exempt measures, including input subsidies and other measures such
as marketing-cost reduction measures: the value of such measures shall be measured
using government budgetary outlays or, where the use of budgetary outlays does not

213 We recall India's position that the complainants have not demonstrated the existence of any market
price support to sugarcane producers in India. (See paras. 7.29-7.30 above)
214 Brazil's responses to Panel question No. 23(a), para. 25, and No. 73, paras. 91 -94; Australia's first
written submission, para. 149; response to Panel question No. 23(a), para. 53 ; Guatemala's response to Panel
question No. 23(a), paras. 45-46.
215 See e.g. Brazil's response to Panel question No. 23(a), para. 26; Australia's response to Panel question
No. 23(a), para. 54; Guatemala's response to Panel question No. 23(a), para. 47.
216 See section 7.1.3.2.4 above.
217 Complainants' responses to Panel question No. 49.
218 Complainants' responses to Panel question No. 49. The complainants add that, to the extent the Panel
finds that the three States provide domestic support in addition to market price support , that support can be
calculated using budgetary outlays, regardless of the precise characterization of each payment or policy. (Ibid.)
We address this issue in the following subsections, as necessary.
219 India's response to Panel question No. 49.
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reflect the full ext ent of the subsidy concerned, the basis for calculating the subsidy
shall be the gap between the price of the subsidized good or service and a representative
market price for a similar good or service multiplied by the quantity of the good or
service.
7.82. In light of the rules set out in paragraphs 10 to 13 of Annex 3, we agree that the "budgetary
outlay" approach is an appropriate methodology to calculate the amount of domestic support
provided through the alleged non-exempt direct payments and other non-exempt policies. We note,
in this respect, that in support of their factual assertions, the complainants adduce official State
Government Budget documents for a number of relevant financial years. From an evidentiary point
of view, the parties agree that the in formation contained in the Budget documents for a particular
financial year reveals budgetary information relating to the sugar season preceding that financial
year.220
7.83. With these considerations in mind, we proceed to our assessment of the parties' argumen ts
and evidence concerning each of the three alleged State-level policies and payments identified by
the complainants.
7.1.3.3.2 Tamil Nadu's transitional production incentives
7.84. The complainants argue that the State Government of Tamil Nadu provides domestic support
to sugarcane producers through direct payments, referred to as "transitional production incentives".
They also point out that Tamil Nadu is one of a number of Indian States that are transitioning from
the SAP to a system of revenue -sharing-based sugarcane prices.221 To facilitate the transition
process, the complainants argue that Tamil Nadu provides direct payments to sugarcane farmers.
According to the complainants, the funds received by sugarcane farmers through these direct
payments are over and above th e funds received through the FRP. The complainants submit that
Tamil Nadu's Budget Publication indicates certain amounts budgeted under the entry "Production
Incentive to Sugarcane Farmers" for the 2017-18 and 2018-19 sugar seasons.222 The complainants
characterize these payments as "non-exempt direct payments", within the meaning of paragraph 1
of Annex 3 of the Agreement on Agriculture. 223 For the reasons outlined in paragraph 7.74 above,
they also argue that the amounts allegedly disbursed to sugarcane farmers for this purpose are not
exempt and therefore should be included in the calculation of India's AMS.224
7.85. India does not raise any arguments regarding Tamil Nadu's alleged transitional production
incentives.
7.86. We begin our analysis by observing that, through the Tamil Nadu Sugarcane (Regulation of
Purchase Price) Act of 2018, Tamil Nadu did indeed replace its SAP with a system of
revenue-sharing-based sugarcane price.225 We also understand that, as of September 2018, Tamil

220 Brazil's first written submission, fn 99 to Table 9 on p. 24 and response to Panel question No. 28(a),
para. 51; Australia's response to Panel question No. 28(c), para. 85; Guatemala's response to Panel question
No. 28(b), fn 102 to Table 12 at para. 67. We note that India's financial year begins in April of a given year and
ends in March of the following year, unlike the sugar season which begins in October of a given year and ends
in September of the following year. (India's first written submission, para. 18; G/AG/AGST/IND, p. 4, para. 6)
221 Brazil's first written submission, para. 163; Australia's first written submission, para. 198; Guatemala's
first written submission, para. 81.
222 Brazil's first written submission, para. 163 and Appendix B-2; Australia's first written submission,
paras. 198-203 and Annex E -8; Guatemala's first written submission, paras. 81 -86 and 176 -179. See also
complainants' responses to Panel question No. 73.
223 Brazil's first written submission, para. 163; Australia's first written submission, para. 202; Guatemala's
first written submission, paras. 176-177 and Table 12(Rev.). Australia and Guatemala submit, alternatively, that
these payments should be included in the calculation "on the basis th at they achieve an AAP" (Australia's first
written submission, para. 203) or that they "effectively extended the validity of the SAP for sugar season 2016/17
to sugar seasons 2017/18 and 2018/19". (Guatemala's first written submission, para. 179)
224 Brazil's first written submission, para. 163; Australia's first written submission, para. 202; Guatemala's
first written submission, para. 177.
225 Tamil Nadu Sugarcane (Regulation of Purchase Price) Act, 2018, (Exhibit JE-65), Section 2(1)(o). We
understand that the transition to the revenue -sharing system was part of a series of recommendations for the
liberalization of India 's sugar sector . (Rangarajan Committee Report, (Exhibits AUS -8, GTM-31, para. 5) The
Tamil Nadu Sugarcane (Regulation of Purchase Price) Act of 2018 provides that the Sugarcane Control Board
"shall … decide the revenue sharing based sugarcane price payable to the sugarcane growers, by the concerned
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Nadu had not yet implemented the revenue -sharing system and continued to be in a transition
process.226 We note that, in order to "facilitate th[at] transition" and to "protect th e interests of
[sugarcane] farmers", for the 2017 -18 sugar season Tamil Nadu introduced the "transitional
production incentive". 227 Through the transitional production incentive, the State Government
endeavoured to assure sugarcane producers of "a price not less than the 2016-17 crushing season
State Advised Price"228, by paying the difference between the amount of the SAP for the 2016 -17
sugar season (i.e. the last SAP prior to the introduction of the transitional production incentive) and
the FRP amount for the 2017 -18 sugar season. 229 In March 2019, Tamil Nadu extended the
application of the "transitional production incentive" to the 2018 -19 sugar season. 230 Therefore,
similar to the previous season, the State Government paid the difference between the SAP for the
2016-17 sugar season and the FRP for the 2018-19 sugar season.231
7.87. Turning to the precise amounts of budgetary outlays, we note t he complainants' assertion
that the official Tamil Nadu Budget Publication covering the 2017-18 and 2018 -19 sugar seasons
indicates certain amounts budgeted for the purpose of the "transitional production incentives". 232
We further note that, in response to a question from th e Panel, the complainants submitted more
recent evidence, seeking to demonstrate the amounts actually disbursed by the State Government
to sugarcane producers, on the basis of which the complainants have updated their calculations of
India's AMS to sugarcane producers.233 In this regard, we also note Brazil's argument that, under
India's budget approach, information on actual government expenditure may be available only two
or three years after the initial budget estimate.234 Thus, based on the most recent information, we
understand that, as a "transitional production incentive", Tamil Nadu disbursed INR 1,364.30 million
directly to the bank accounts of 146,058 sugarcane farmers for the 2017 -18 sugar season235 and
INR 980.30 million to the bank accounts of 100,918 sugarcane farmers for the 2018 -19 sugar
season.236
7.88. It is uncontested that these transitional production incentives constitute "direct payment s"
from the State Government to sugarcane producers. Indeed, we note that, in its ordinary meaning,
the term "payment" means "[a] sum of money (or equivalent) paid or payable".237 In the context of
paragraph 1 of Annex 3, the payment must be (i) "non -exempt", meaning that it must not be
exempted, or otherwise excluded, from the calculation of a Member's AMS, pursuant to the
Agreement on Agriculture , and (ii) "direct", meaning, inter alia, that the payment must be made
"without intervening factors or intermediaries". 238 We also recall that, pursuant to paragraph 3 of
Annex 3 of the Agreement on Agriculture, "[s]upport at both the national and sub-national level shall
be included" in the calculation of a Member's product-specific AMS.
7.89. In the circumstances before us, we observe that Tamil Nadu has published, through an official
State Order, "Detailed guidelines for implementation of disbursement of transitional production
incentive directly to the farmers through Direct Benefit Transfer".239 We note that these guidelines

sugar factories". Moreover, the sugarcane price is defined as the higher value among the price arrived at a sum
equal to (i) 70% of the "ex-factory basic value of sugar and the primary by-products such as bagasse, molasses
and press mud"; or (ii) 75% of the "ex -factory basic value of sugar alone". (Tamil Nadu Sugarcane (Regulation
of Purchase Price) Act, 2018, (Exhibit JE-65), Sections 6(a), 9(1)(i) and (ii))
226 Order of 17 September 2018, (Exhibit JE-88), para. 4.
227 Order of 24 July 2018, (Exhibit AUS -54). See also Order of 7 March 2019, ( Exhibit JE-136), p. 1;
Budget Speech of 15 March 2018, (Exhibit JE-89), para. 29.
228 Tamil Nadu Policy Note 2020 -21, (Exhibit JE -169), p. 362 ; Order of 17 September 2018,
(Exhibit JE-88), para. 6.
229 See e.g. Order of 7 March 2019, (Exhibit JE-136), para. 3.
230 Order of 7 March 2019, (Exhibit JE-136), paras. 7-8.
231 See e.g. Tamil Nadu Policy Note 2020-21, (Exhibit JE-169), p. 362-363.
232 Tamil Nadu Budget Publication for the 2019-2020 financial year, (Exhibit JE-137), p. 71.
233 Complainants' responses to Panel question No. 73 (referring to Tamil Nadu's Policy Note, 2020 -21,
(Exhibit JE-169), p. 362).
234 Brazil's response to Panel question No. 28(d), para. 57.
235 Tamil Nadu Policy Note 2020–21, (Exhibit JE-169), p. 362.
236 Tamil Nadu Policy Note 2020–21, (Exhibit JE-169), pp. 362-363.
237 Oxford English Dictionary online, definition of "payment, n.1"
https://www.oed.com/view/Entry/139189 (accessed 22 July 2021). In this regard, we also recall the Appellate
Body's finding that the term "payment" denotes "a transfer of economic resources". Appellate Body Report,
238 Oxford English Dictionary online, definition of "direct, adj. and adv."
https://www.oed.com/view/Entry/53293 (accessed 22 July 2021).
239 Order of 24 July 2018, (Exhibit AUS-54), Annexure. (underlining added)
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describe, inter alia, the eligibility criteria for sugarcane farmers to receive the transitional production
incentives, the implementation phases, and the procedure for the disbursement of the allocated
amounts of money. Specifically, we understand from these guidelines that the State Director of
Sugar prepared a database of eligible farmers, based on the information previously submitted by
the sugar mills, including information on the quantity of sugarcane supplied by each farmer, along
with the farmer's land holding credentials and bank account details.240 Once the database of farmers
was verified and published, the State Director of Sugar was mandated to transfer the amount of
money directly into the sugarcane farmers' bank accounts.241 Furthermore, we note that none of the
parties argue, nor can we see any reason to consider, that the payments provided under the
transitional production incentive are exempted, or otherwise excluded, from the calculation of India's
AMS to sugarcane producers.
7.90. In light of the above, we find that, through the transitional production incentive, Tamil Nadu
provided domestic support to sugarcane producers in the form of "non -exempt direct payments",
within the meaning of paragraph 1 of Annex 3 of the Agreement on Agriculture, during the 2017-18
and 20 18-19 sugar seasons. 242 Consequently, and in accordance with the budgetary outlay
methodology described in paragraph 10 of Annex 3, we include the amounts indicated in
paragraph 7.87 in our calculation of India's AMS to sugarcane producers for those two sugar
seasons.243
7.1.3.3.3 Andhra Pradesh's purchase tax remittances
7.91. The complainants s ubmit that the State Government of Andhra Pradesh remits sugarcane
purchase taxes to sugarcane producers, thus providing domestic support that should be included in
the calculation of India's AMS to sugarcane producers. Specifically, the complainants argue that
Andhra Pradesh budgeted an amount of INR 66 million under the budget entry "Assistance to
Co-operative Sugar Factories towards reimbursement of Purchase Tax incentives" for the 2014-15
and 2015-16 sugar seasons.244 The complainants argue that the sugarcane purchase tax that would
normally be paid by sugar mills to the State Government was foregone in favour of sugarcane
producers.245 As a result, in both of these seasons, sugarcane producers in Andhra Pradesh allegedly
received funds over and above the amount of the FRP. Brazil and Australia argue that, there is lack
of evidence or clarity as to exactly how these funds were transferred to sugarcane farmers.246 These
factual uncertainties result in somewhat different views among the complainants as to whether t he
purchase tax remittance constitutes a "non -exempt direct payment" or an "other non -exempt
policy".247 In any event, all complainants submit that sugarcane producers in Andhra Pradesh

240 Order of 24 July 2018, (Exhibit AUS-54), Annexure, para. III(i).
241 Order of 24 July 2018 , (Exhibit AUS-54), paras. 3 –5, 9, Annex ure. para. III. We also note that the
terms "direct", or "directly" appear in subsequent official State publications relating to the transitional production
incentive. (See e.g. Budget Speech of 15 March 2018, (Exhibit JE-89), para. 29)
242 We therefore do not consider it necessary to engage with Australia and Guatemala's alternative
arguments regarding Tamil Nadu's transitional production incentive, outlined in fn 223 to para. 7.84 above.
243 See sections 7.1.3.3.5 and 7.1.3.4 below.
244 Brazil's first written submission, para. 163 and A ppendix B-1; Australia's first written submission,
paras. 190-194 and Annex E -1; Guatemala's first written submission, paras. 97 -99 and 180-184. Initially, the
complainants argued that Andhra Pradesh remitted sugarcane purchase taxes also during the 2016-17 sugar
season. (Brazil's first written submission, para. 163; Australia's first written submission, para. 191; Guatemala's
first written submission, para s. 98 and 183) They subsequently withdrew those arguments and omitted the
alleged amounts from their calculation s of India's AMS to sugarcane producers . (Complainants' responses to
Panel question No. 28(d))
245 Brazil's first written submission, para 163; Australia's first written submission, para. 190; Guatemala's
first written submission, paras. 97 and 180.
246 Brazil's responses to Panel question No. 50, para. 26, and No. 74(b), para. 98; Australia's response to
Panel question No. 50, para. 8.
247 Brazil and Australia describe two possibilities: (i) the pu rchase tax amount that would normally "be
remitted by the sugar factories to the [government]" was waived and instead "passed on to the cane suppliers"
or sugarcane farmers, in which case it would be an "other non-exempt policy" in the form of revenue foregone;
or (ii) it may be that the State Government reimbursed the sugar mills the purchase tax amount so that it could
be paid to the sugarcane farmers, in which case it would qualify as "non -exempt direct payment". (Brazil's first
written submission, para. 163; and response to Panel question No. 50; Australia's first written submission,
para. 193; and response to Panel question No. 50 (referring to CACP Price Policy for Sugarcane: 2018-19 Sugar
Season, (Exhibit JE-52), p. 57, Annex Table 2.2)) In Guatemala's view, Andhra Pradesh provides support in the
form of an "other non -exempt policy", because "measures consisting of revenue foregone would not fall within
the category of 'direct payment', but rather under the category of an 'other subsidy'." We note that Guatemala
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received non -exempt domestic support over and above the FRP and which therefore should be
included in India's AMS to sugarcane producers.248
7.92. India argues that the Andhra Pradesh purchase tax remittance was discontinued as of
November 2018.249 India also contends that no amounts were disbursed to sugarcane producers for
this budget entry for the 2015-16 sugar season, and that "no … document has been placed on record
showing actual receipt and disbursement for [the] 2014-15 sugar season".250
7.93. We begin our analysis by noting that the alleged domestic support measure at issue, which
the complainants assert should be included in the calculation of India's AMS, is the set of so -called
"purchase tax remittances" referred to by the complainants. According to the complainants, these
purchase tax remittances were in the form of budgetary disbursements by the State Government in
favour of sugarcane producers. Hence, the question of whether we must include such remittances
in the calculation of India's AMS to sugarcane producers, depends on whether such purchase tax
remittances existed – in other words, whether such disbursements were actually made.
7.94. In seeking to substantiate their arguments regarding the existence and amounts of support
allegedly provided by Andhra Pradesh to sugarcane producers, the complainants mainly rely on two
types of evidence: (i) two annual publications by the Commission for Agricultural Costs and Prices
(CACP)251, concern ing India's "Price Policy for Sugarcane" for the 2018 -19 and 2019 -20 sugar
seasons that also inc lude certain information relating to past sugar seasons, and (ii) the annual
publications of Andhra Pradesh's Budget Estimates for five consecutive financial years (2015-16 to
2019-20), covering the 2014-15 to 2018-19 sugar seasons. Below, we examine the c omplainants'
arguments in relation to these two types of evidence in turn.
7.95. Regarding the annual CACP publications , we observe that, in support of their assertions
concerning the 2014-15 sugar season, the complainants rely on a single entry contained in the CACP
publication for the 2018 -19 sugar season, which indicates that the sugarcane price paid by sugar
mills to sugarcane producers in Andhra Pradesh in the 2014-15 sugar season included the "FRP &
purchase tax incentive of Rs.6 per quintal".252 The publication goes on to indicate that the purchase
tax was "to be remitted by the sugar factories to the Govt [and was] being passed on to the cane
suppliers".253 For the 2015-16 sugar season, the complainants rely on an entry contained in the
CACP publications for both the 2018-19 and 2019-20 sugar seasons. This entry merely states that
sugar mills paid the "FRP with incentives which differ from factory to factory". 254 We understand
that, in the complainants' view, the CACP publications demonstrate that the purchase tax remittance
existed in Andhra Pradesh. 255 In our view, however, the CACP publications alone do not suffice to
demonstrate that any disbursements were actually made by the State Government to sugarcane
producers.
7.96. Turning to Andhra Pradesh's Budget Estimates, we consider it useful to begin by explaining
how such Estimates should be read, based on what we have learned from the parties through
responses to questions, as well as from Andhra Pradesh's own Budget Manual. First, we note tha t
an amount budgeted for a particular financial year actually shows the payments made for the sugar
season preceding that financial year. 256 Furthermore, Andhra Pradesh's Budget Estimates contain
three columns. Each annual publication of Budget Estimates for a forthcoming financial year includes
a column indicating the "Budget Estimate" (column 2) for the previous financial year, as well as a
"Revised Estimate" for that previous financial year (column 3). While those two columns relate to,

stated that it would not object to the Panel finding it to be a "non-exempt direct payment". (Guatemala's response
to Panel question No. 50, paras. 12-14)
248 The complainants argue, alternatively, that the alleged support should be included in India's AMS to
sugarcane producers as administered prices providing market price support. (Brazil's first written submission,
fn 360 to para. 254; Australia's first written submission, para. 194; Guatemala's first written subm ission,
para. 184)
249 India's first written submission, para. 43; response to Panel question No. 50.
250 India's response to Panel question No. 74(b).
251 To recall, the CACP is a body attached to the Ministry of Agriculture and Farmers' Welfare in India.
252 CACP Price Policy for Sugarcane: 2018-19 Sugar Season, (Exhibit JE-52), p. 57, Annex Table 2.2.
253 CACP Price Policy for Sugarcane: 2018-19 Sugar Season, (Exhibit JE-52), p. 57, Annex Table 2.2.
254 CACP Price Policy for Sugarcane: 2018 -19 Sugar Season , (Exhibit JE-52), p. 57, Annex Table 2.2;
CACP Price Policy for Sugarcane: 2019-20 Sugar Season, (Exhibit JE-53), p. 56, Annex Table 1.3.
255 Complainants' responses to Panel question No. 74(b).
256 See para. 7.82 above.
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and reconcile, the previous financial year, a final column (column 4) indicates the "Budget Estimate"
for the forthcoming financial year. In addition to these "estimate" columns, most (but not all) of
Andhra Pradesh's Budget Estimates include a column (column 1) that indicates the "Accounts"257 for
the financial year that occurred two years prior . All parties agree that this column reflects actual
disbursements of funds.258 Thus, in light of the measure at issue and in the circumstances of this
case, we consider it appropriate to focus our attention on the "Accounts" columns in the most
recently available Budget Estimates in order to discern the amounts of budgetary outlays, if any,
that Andhra Pradesh actually disbursed during the 2014-15 and 2015-16 sugar seasons.
7.97. We note that certain budget columns, for certain entries, in the relevant Budget Estimates do
not contain an amount, but contain two dots. Australia and Guatemala submit that the meaning of
these two dots is "ambiguous" or "not immediately clear".259 India, for its part, submits that where
a budget column contains two dots, th is means that no amounts have been disbursed towards the
specific entry.260 For Australia and Guatemala, India's response is insufficient, due to its choice of
words, to demonstrate that no disbursements were actually made .261 We note that Australia and
Guatemala's assertions contradict those made by all complainants earlier in these proceedings. We
recall that, until the second substantive meeting of the Panel, the compla inants themselves
considered that budget columns containing two dots demonstrated that no amounts had actually
been disbursed.262 Based on the evidence on record and the parties' arguments, we interpret the
Budget Estimates such that if a relevant budget column contains an amount, it indicates that that
amount has been budgeted or disbursed, and, conversely, if it does not contain any amount (or
contains two dots) it indicates that no amounts have been budgeted or disbursed. We apply this
understanding in our assessment of the relevant budget columns covering the 2014-15 and 2015-16
sugar seasons.
7.98. With respect to the 2014 -15 sugar season, an amount of INR 65.97 million was initially
budgeted under the entry "Assistance to Co -operative Sugar Factories towards reimbursement of
Purchase Tax incentives". 263 The same amount appears in the corresponding "Revised Estimate"
column.264 However, we note that the "Accounts" column for the 2015 -16 financial year, which
corresponds to the budgetary outlays made during 2014-15 sugar season, contains no amount. 265
This indicates that although an amount was initially budgeted, no such disbursement was actually
made. With respect to the 2015 -16 sugar season, an amount of INR 65.97 million was initially
budgeted under the entry "Assistance to Co -operative Sugar Factories towards reimbursement of
Purchase Tax incentives". 266 The same amount appears in the "Revised Estimate" column.267
However, as was the case for the preceding season, the "Accounts" column for the 2016-17 financial
year, which corresponds to the budgetary outlays made during 2015-16 sugar season, contains no
amount.268 This indicates that although an amount was initially budgeted, no such disbursement was
actually made.
7.99. We therefore understand that no budgetary outlay was ever made with respect to the alleged
Andhra Pradesh purchase tax remittance. We note the complainants' argument that India's assertion
that the purchase tax remittance has been discontinued as of 2018 reveals the existence of that

257 Pursuant to Andhra Pradesh's Budget Manual, "[a]ccounts or actuals of a year are the amounts of
receipts and disbursements for the financial year beginning on April 1st and ending on March 31st following, as
finally recorded in the Accountant -General's books". (Andhra Pradesh Budget Manual, (Exhibit JE -170),
Article 2.1(1))
258 Parties' responses to Panel question No. 74(a).
259 Australia's response to Panel question No. 74(b), para. 80; Guatemala's response to Panel question
No. 74(b), para. 75.
260 India's response to Panel question No. 74(b); response to Guatemala's question No. 2.
261 Australia and Guatemala's comments on India's response to Panel question No. 74(b).
262 Specifically, in withdrawing their initial assertions regarding the 2016 -17 sugar season (see fn 244 to
para. 7.91 above), the complainants considered, inter alia, the "Accounts" column for the corresponding 2017-18
financial year (which also contains two dot s) to demonstrate that no amounts had actually been disbursed.
(Complainants' responses to Panel question No. 28(d) (referring to Andhra Pradesh Budget Estimates for the
2019-20 financial year, (Exhibit JE-146)))
263 Andhra Pradesh Budget Estimates for the 2015-16 financial year, (Exhibit JE-86), p. 18.
264 Andhra Pradesh Budget Estimates for the 2016-17 financial year, (Exhibit JE-134), p. 17.
265 Andhra Pradesh Budget Estimates for the 2017-18 financial year, (Exhibit JE-135), p. 30.
266 Andhra Pradesh Budget Estimates for the 2016-17 financial year, (Exhibit JE-134), p. 17.
267 Andhra Pradesh Budget Estimates for the 2017-18 financial year, (Exhibit JE-135), p. 30.
268 Andhra Pradesh Budget Estimates for the 2018-19 financial year, (Exhibit JE-85), p. 33.
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purchase tax remittance.269 However, we are not persuaded that India's statement as to when this
scheme was discontinued necessarily demonstrates that disbursements were made under that
scheme in the sugar seasons preceding the date of discontinuation . In our view, if the alleged
purchase tax remittances were disbursed, they would be reflected in the relevant Andhra Pradesh
Budget Estimates.
7.100. In light of the foregoing, we find that the complainants have failed to demonstrate that the
State Government of Andhra Pradesh remitted purchase tax es in favour of, or to, sugarcane
producers during the 2014-15 and 2015-16 sugar seasons.270 Consequently, we do not include the
alleged amounts in our calculation of India's AMS to sugarcane producers.
7.1.3.3.4 Karnataka's incentive price payments
7.101. Brazil and Australia 271 submit that the State Government of Karnataka provide s domestic
support to sugarcane producers through "incentive price payment s". They assert that Karnataka
budgeted an amount of INR 100,000 for this purpose during the 2017-18 sugar season.272 They also
assert that the funds provided by Karnataka to sugarcane producers through these incentive price
payments were separate from the FRP, and constituted "non-exempt direct payments" within the
meaning of paragraph 1 of Annex 3 of the Agreement on Agriculture. 273 Moreover, Brazil and
Australia submit that these payments were not made to maintain the price gap, within the meaning
of paragraph 8 of Annex 3, because, inter alia, although they were made "through Sugar Factories",
as indicated in the Budget Estimates, they ultimately benefitted sugarcane producers, not sugar
mills.274 Recalling that paragraph 7 of Annex 3 provides that measures "directed at agricu ltural
processors shall be included" in the calculation of AMS "to the extent that such measures benefit the
producers of the basic agricultural products", Brazil and Australia submit that these incentive price
payments should be included in the calculation of India's AMS to sugarcane producers.275
7.102. India has not contested Brazil and Australia's characterization of the alleged payments, nor
has it argued that they are exempt, or otherwise excluded, from the calculation of India's AMS under
any provision of the Agreement on Agriculture. Regarding the fact that the payments were made
through sugar mills, India asserts that "[t]he complainants bear the burden to prove [the] necessary
elements of their claims."276 Moreover, India asserts that Brazil and Australia failed "to produce any
official notification/order in support of their contention on incentive payments over and above the
FRP".277 In any event, India asserts, Karnataka "did not provide funds under this programme."278
7.103. We begin our analysis by noting that, in seeking to substantiate their arguments regarding
the existence and precise amounts of support to sugarcane farmers allegedly provided by Karnataka,
Brazil and Australia mainly rely on an entry in Karnataka's Budget Estimates for the 2019-20 financial

269 Complainants' responses to Panel question No. 74(b). India submits that "with the introduction of the
Central Government Goods and Service Tax (GST) in 2017, the said purchase tax remission has been
discontinued with effect from 14 Novembe r 2018 ." (India's first written submission, para. 43 (referring to
Notification from the Ministry of Finance of 14 November 2018 (Goods and Services Tax Compensation ),
(Exhibit IND-5)))
270 For these reasons, we do not consider it necessary to address the complainants' alternative arguments
with respect to Andhra Pradesh's alleged domestic support outlined in fn 248 to para. 7.91 above.
271 As noted above, following the second substantive meeting of the Panel, G uatemala withdrew its
assertions regarding Karnataka's "incentive price payments" and omitted the alleged amounts from its calculation
of India's AMS to sugarcane producers. (Guatemala's comments on India's response to Guatemala's question
No. 3 (referring to Exhibit GTM-45 (revised 12 May 2021)).
272 Brazil's first written submission, para. 163 and A ppendix B-3; Australia's first written submission,
paras. 195 -197 and Annex E -5 (referring to Karnataka Budget Estimates for the 2019 -20 financial year,
(Exhibit JE-90, p. 44)).
273 Brazil's first written submission , para. 163 ; Australia's first written submission, para. 19 7. Both
complainants submit that even if the alleged payments are to be characterized as "other non -exempt policies",
they would still need to be included in the calculation of India's AMS to sugarcane producers (Brazil and Australia's
responses to Panel question 27(b)) Australia argues, alternatively, that the alleged payments are directed at
maintaining the sugarcane price "gap" and requests the Panel to find that "it is a measure through which India
is providing domestic support above de minimis". (Australia's response to Panel question No. 27(a), para. 77)
274 Brazil and Australia's responses to Panel question No. 27(b).
275 Brazil and Australia's responses to Panel question No. 27(b).
276 India's response to Panel question No. 27.
277 India's comments on the complainants' responses to Panel question Nos. 75-77, para. 10.
278 India's comments on the complainants' responses to Panel question Nos. 75-77, para. 10.
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year, i.e. the "Payment of Incentive Price for Sugar Cane through Sugar Factories. Subsidies". 279
Additionally, Brazil and Australia provide certain supporting arguments and evidence, which, we
understand, do not, on their own, establish the existence or the amounts of the alleged payments.
Rather, we understand that these arguments and evidence seek to demonstrate the purpose, as well
as the legal characterization of the alleged payments, i.e. tha t they do not constitute payments
made to maintain the price gap within the meaning of paragraph 8 of Annex 3 280, and should be
included in the calculation of India's AMS to sugarcane producers. Therefore, we consider it
reasonable to first address the argu ments and evidence relating to the existence and amounts of
the alleged payments, i.e. Karnataka's Budget Estimates. We then turn to address the supporting
arguments and evidence.
7.104. With respect to Karnataka's Budget Estimates, we recall our discussion relating to the
interpretation of the Indian States' Budget documents in the context of Andhra Pradesh's alleged
support to sugarcane producers. In particular, we recall our discussion on the relevance of the
"Accounts" column of the Budget Estimates with respect to any governmental expenditures. 281 All
parties agree that the "Accounts" column, as interpreted in Andhra Pradesh's Budget Estimates, is
likely to have the same meaning in Karnataka's Budget Estimates. 282 From the parties' responses,
as well as our own assessment of Karnataka's Budget Manual283, we understand that, indeed, actual
expenditures related to a certain budget entry during a particular sugar season will be reflected in
the "Accounts" column for the corresponding financial year. In this rega rd, we recall Brazil's
argument that, "under India's budget approach, information on actual government expenditure may
be available only two or three years after the initial budget estimate".284 Therefore, as was the case
for Andhra Pradesh, in light of the measure at issue and in the circumstances of this case , we
consider it appropriate to focus our analysis on the "Accounts" column in the most recently available
Budget Estimates in order to discern the amounts of budgetary outlay s, if any, that Karnataka
actually disbursed during the 2017-18 sugar season.
7.105. Regarding the 2017 -18 sugar season, Karnataka's Budget Estimates for the 2019 -20
financial year indicate an amount of 1 lakh (i.e. INR 100,000.00) under the columns "Budget
2018-19" and "Revised 2018-19", for the entry "Payment of Incentive Price for Sugar Cane through
Sugar Factories . Subsidies ".285 We note that in response to a Panel question, the complainants
submitted a more recent publication of Karnataka's Budget Estimates, for the 2020-21 financial year,
containing the "Accounts" column for the 2018 -19 financial year (which should reveal actual
government disbursements for the 2017-18 sugar season, if any ).286 As pointed out b y Brazil and
Australia, the entry "Payment of Incentive Price for Sugar Cane through Sugar Factories. Subsidies"
does not appear in these newly-submitted Budget Estimates , indicating that no amounts were
disbursed for this particular budget entry.287 Our understanding of the Budget Estimates reveals that
the fact that the State initially budgeted a certain amount in its Budget Estimates does not
necessarily mean that payments were actually made to sugarcane producers . Moreover, we

279 Karnataka Budget Estimates for the 2019-20 financial year, (Exhibit JE-90), p. 44.
280 In this respect, Brazil states that " the evidence substantiates that [the incentive price payments] are
non-exempt direct payments that should be calculated towards the AMS. " (Brazil's response to Panel question
Nos. 76-77, paras. 111-112) Australia relies on this evidence "to support its assertion that the incentive price
payments identified in Exhibit JE-90 constitute a form of non-exempt support that paragraph 1 of Annex 3 of the
Agreement on Agriculture stipulates may be included in the calculation of India's AMS for sugarcane". (Australia's
response to Panel question Nos. 76-77, para. 96) See also fn 298 to para. 7.107 below.
281 See para. 7.96 above.
282 Parties' responses to Panel question No. 74(c).
283 We note that the "[a]ccounts or actuals of a year' are the amounts of receipts and disbursements for
the year beginning on first April and ending on the last day of March following as finally recorded in the books of
the Accountant General." (Karnataka Budget Manual, (Exhibit JE-172), Article 32)
284 Brazil's response to Panel question No. 28(d), para. 57.
285 Karnataka Budget Estimates for the 2019-20 financial year, (Exhibit JE-90), p. 44. We recall that any
estimates, or expenditures made for the 2017 -18 sugar season, will be reflected under the 2018 -19 financial
286 Karnataka Budget Estimates for the 2020-21 financial year, (Exhibit JE-173).
287 We note that, in response to a question from Guatemala, India submits that the absence of the relevant
entry in the Budget Estimates indicates that no amounts were disbursed by the State. (India's response to
Guatemala's question No. 3) We also note that, based on India's explanation and the most recent Budget
Estimates, Guatemala wit hdrew its arguments regarding Karnataka's alleged payments. (See fn 271 to
para. 7.101 above)
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emphasize that the 2020 -21 Budget Estimates reveal that no such payments were, in fact,
disbursed.288
7.106. At this juncture, we turn to also assess Brazil and Australia's supporting arguments and
evidence.289 We recall that in conducting our assessment of Tamil Nadu's direct payments 290, we
analysed, inter alia, Tamil Nadu's transition from the SAP to the revenue -sharing-based sugarcane
price. That analysis revealed important information relating to the disbursement of direct payments
to sugarcane producers, which ultimately, along with other exhibits on the rec ord, demonstrated
that such payments were made. We observe that, similarly to Tamil Nadu, Karnataka is among the
States that have transitioned (or are transitioning) from the SAP to a system of
revenue-sharing-based sugarcane prices. The revenue-sharing system was introduced through the
Karnataka Sugarcane (Regulation of Purchase and Supply) Act 291, subsequently amended by the
Karnataka Sugarcane (Regulation of Purchase and Supply) Amendment Act in 2014. 292 Pursuant to
the Karnataka Sugarcane Amendment Act, the payment of the sugarcane price is divided into two
stages. First, sugarcane producers receive the Central Government's FRP. Second, they receive an
"additional sugarcane price".293 The additional sugarcane price is defined as the price "to be paid by
the occupier of the factory to the sugarcane grower for the sugarcane delivered over and above
[the] Fair and Remunerative Price".294
7.107. We understand that, in the view of Brazil and Australia, the amounts budgeted for the
incentive price payments, as identified in Karnataka's Budget Estimates for the 2019 -20 financial
year, may be connected to the system of revenue -sharing-based sugarcane prices, or, more
specifically, to the "additional sugarcane price". 295 We observe, however, that nothing in the
evidence demonstrates that the initially estimated amounts for the incentive price payments were
budgeted for the purpose of supporting sugar mills in paying the "additional sugarcane price" under
the second stage of the revenue-sharing system. Furthermore, nothing in the Budget Estimates or
any other evidence on the record indicates any relationship between the alleged incentive price
payments and Karnataka's transition from the SAP to the system of revenue -sharing-based
sugarcane pric es. In comparison, in the case of Tamil Nadu 296, relevant State Orders clearly
demonstrate the purpose and operation of the transitional production incentives. Moreover, with
respect to Tamil Nadu, all other supporting evidence explicitly refers to the "tra nsitional production
incentives", while providing additional information that led us to conclude that those payments were
indeed made, and for that particular purpose.297 In any event, and particularly in light of Karnataka's
Budget Estimates as described in paragraphs 7.104-7.105, we do not see how the existence of the

288 We note Brazil and Australia's agreement that, where different publications of the same type of
document contain contradictory factual information, the most recently published one is likely to be more accurate
and up-to-date than older publications. (Brazil and Australia's responses to Panel question No. 64)
289 See para. 7.103 above.
290 See section 7.1.3.3.2 above.
291 Karnataka Sugarcane Act, (Exhibit AUS-52), Section 4(f).
292 Karnataka Sugarcane Amendment Act, (Exhibit GTM-28).
293 Karnataka Sugarcane Amendment Act, (Exhibit GTM-28), pp. 4-5, Section 8, amending Sections 9(1)
and 9(1A) of the Karnataka Sugarcane Act.
294 Karnataka Sugarcane Amendment Act, (Exhibit GTM-28), p. 2, Section 2, amending S ection 2 of the
Karnataka Sugarcane Act. See also Cane Commissioner's Annual Report, 2017-18, (Exhibit JE-139), para. 8.
295 Brazil states that Karnataka's payments to farmers were made to ensure "higher-than-FRP revenues"
under the revenue-sharing system. (Brazil's response to Panel question No. 27(c), para. 50) Australia compares
Karnataka's payments to the "transitional production incentives" in Tamil Nadu and suggests that they may also
have been made to assist sugarcane farmers with the transition from the SAP to the revenue -sharing system.
(Australia's response to Panel question No. 27(a), para. 74) Australia also submits, alternatively, that Karnataka's
payments supported sugar mills in paying the "additional sugarcane price" under the revenue -sharing system.
(Ibid. para. 75)
296 See section 7.1.3.3.2 above.
297 We note Brazil and Australia's arguments that there is limited evidence regarding the exact operation
of the incentive price payments. (Brazil's response to Panel question No. 75, paras. 106-108; Australia's response
to Panel question No 75, paras. 88 -89) The complainants add that India "has refused to assist the Panel with
information in its exclusive possession", or that " India has not helped improve Australia's understanding of the
Karnataka Scheme". (Ibid.) India, on the other hand, argues that "if the complainants consider any document
as evidence, it is the complainants' burden to explain those documents". (India's comments on the complainants'
responses to Panel question Nos. 75-77)
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revenue-sharing system or the "additional sugarcane price" supports a finding that incentive price
payments were actually made during the 2017-18 sugar season.298
7.108. As a result, we find that Brazil and Australia have failed to demonstrate that the State of
Karnataka provided incentive price payments to sugarcane producers during the 2017-18 sugar
season.299 Consequently, we do not include the alleged amount in our calculation of India's AMS to
sugarcane producers.
7.1.3.3.5 Amount of non-exempt direct payments or other non -exempt policies to
sugarcane producers
7.109. For the foregoing reasons, we find that India provided non -exempt direct payments to
sugarcane producers during the 2017-18 and 2018-19 sugar seasons, and we include these amounts
in our calculation of India's AMS to sugarcane producers, as follows300:
Sugar season Non-exempt direct payments or other non-exempt policies
(INR million)
2014-15 n/a
2015-16 n/a
2016-17 n/a
2017-18 1,364.30
2018-19 980.30

7.1.3.4 Overall calculation
7.110. We recall that the calculation of a Member's product -specific AMS should take into account
market price support, non -exempt direct payments, and other non -exempt policies. Based on our
findings above, we therefore find that India's AMS to sugarcane producers was as follows301:
Sugar
season
Market price support
(INR million)
Non-exempt direct
payments and other
non-exempt policies
(INR million)
AMS to sugarcane
producers
(INR million)
2014-15 903,750.80 n/a 903,750.80
2015-16 880,418.99 n/a 880,418.99
2016-17 815,045.69 n/a 815,045.69
2017-18 1,072,685.61 1,364.30 1,074,049.91
2018-19 1,110,085.53 980.30 1,111,065.83

7.1.4 Comparison and conclusion
7.111. We recall that the assessment of India's compliance with Article 7.2(b) of the Agreement on
Agriculture entails comparing India's actual AMS to sugarcane producers with the level of
product-specific domestic support that India is permitted to provide. As explained above, we consider
it relevant and appropriate to make this comparison for five recent sugar seasons, from 2014-15 to
2018-19.302 We summarize this comparison as follows303:

298 As noted in para. 7.103 above, Brazil and Australia submitted further supporting arguments and
evidence, seeking to demonstrate the legal characterization of the alleged payments. (Brazil's response to Panel
question Nos. 27(a), fn 103 to para. 46, and 27(c), fn 110, to para. 50; Australia's response to Panel question
No. 27(a), fn 112 to para. 73 (referring to Cane Commissioner's Annual Report, 2017-18, (Exhibit JE-139), note
to para. 5; and CACP Price Policy for Sugarcane: 2019-20 Sugar Season, (Exhibit JE-53), p. 56, Annex Table 1.3)
Having found that no such payments were made to sugarcane producers in the 2017 -18 sugar season, we do
not consider it necessary to further address those arguments and evidence.
299 Therefore, we do not consider it necessary to address Australia's alternative arguments regarding
Karnataka's alleged domestic support to sugarcane producers, outlined in fn 273 to para. 7.101 above.
300 See para. 7.90 above.
301 See paras. 7.67 and 7.109 above.
302 See para. 7.11 above.
303 See paras. 7.17 and 7.110 above.
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Sugar season Actual AMS to sugarcane
producers (INR million)
Permitted level of product-
specific support
(INR million)
2014-15 903,750.80 96,529.00
2015-16 880,418.99 95,864.00
2016-17 815,045.69 94,698.00
2017-18 1,074,049.91 117,351.00
2018-19 1,111,065.83 123,049.00

7.112. In view of the fact that, for five consecutive sugar seasons, from 2014-15 to 2018-19, India
provided non-exempt domestic support to sugarcane producers in excess of the permitted level of
10% of the total value of sugarcane production, we conclude that India is acting inconsistently with
Article 7.2(b) of the Agreement on Agriculture.
7.2 Export subsidies
7.2.1 Introduction
7.113. The complainants challenge certain of India's federal-level measures pertaining to sugar or
sugarcane, which are implemented through a number of legal instruments. 304 The complainants
argue that the measures at issue are export subsidies inconsistent with India's obligations under the
Agreement on Agriculture and the SCM Agreement.
7.114. As an initial point, we wish to address certain differences in the way the complainants frame
the measures at issue and their requests for findings.
7.115. Brazil requests that the Panel make separate findings with respect to the following
"measures"305: (i) Scheme for assistance to sugar mills for the 2018 -19 sugar season; (ii) Scheme
for creation and maintenance of buffer stock in 2018; (iii) Scheme for creation and maintenance of
buffer stock in 2019 ; (iv) S cheme for assistance to sugar mills for the 2017 -18 sugar season;
(v) Scheme for extending production subsidy to sugar mills for the 2015 -16 sugar season ; and
(vi) the Marketing and Transportation Scheme. 306 Brazil underscores that the first five of these
schemes operate together with the Minimum Indicative Export Quotas (MIEQs), whereas the
Marketing and Transportation Scheme operates together with the Maximum A dmissible Export
Quantity (MAEQ).307 Brazil claims that these schemes constitute export subsidies within the meaning
of Article 9.1(a) of the Agreement on Agriculture and are inconsistent with India's obligations under
Articles 3.3 and 8 of that Agreement.308
7.116. Australia submits that India provides export subsidies through the following subsidy
schemes: (i) the Production Assistance Scheme, operating in conjunction with the MIEQs; (ii) the
Buffer Stock Scheme, operating in conjunction with the MIEQs; (iii) the Marketing and Transportation
Scheme, operating in conjunction with the MAEQ; and (iv) the Duty Free Import Authorization (DFIA)
Scheme for sugar.309 Australia requests that the Panel find that these schemes constitute export
subsidies within the meaning of Article 9.1(a) of the Agreement on Agriculture and are inconsistent
with India's obligations under Articles 3.3 and 8 (or, in the alternative, Articles 8 and 10 .1) of the
Agreement on Agriculture, and with Articles 3.1(a) and 3.2 of the SCM Agreement.310
7.117. Guatemala maintains that India provides export subsidies through: (i) the Production
Assistance Scheme, operating in conjunction with the MIEQs; (ii) the Buffer Stock Scheme, operating

304 Brazil's panel request, para. 14; Australia's panel request, para. 19 and para. 9 of Annex A thereto;
Guatemala's panel request, para. 9 and para. 9 of the Annex thereto.
306 Brazil's second written submission, paras. 82-83; response to Panel question No. 79.
307 Brazil's first written submission, paras. 177 -179. As explained in section 7.2.2.1 below, the MIEQ
orders allocate to sugar mills minimum sugar export quotas, whereas the MAEQ allocates maximum sugar export
quotas, on a per -mill basis. The com plainants do not challenge the MIEQs and the MAEQ as such.
(See para. 7.122 below)
308 Brazil's first written submission, para. 233.
309 Australia's first written submission, para. 223.
310 Australia's first written submission, para. 468.
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in conjunction with the MIEQs 311; and (iii) the Marketing and Transportat ion Scheme, operating in
conjunction with the MAEQ. 312 Guatemala claims that these schemes constitute export subsidies
within the meaning of Articles 9.1(a) and 9.1(c) of the Agreement on Agriculture and are inconsistent
with India's obligations under Articles 3.3, 8, and 9.1 of that Agreement, as well as with Article 3.1(a)
of the SCM Agreement.313
7.118. We note that, unlike Australia and Guatemala, Brazil identifies as "measures", and requests
separate findings of WTO -inconsistency regarding, what appear to be a nnual iterations of certain
schemes.314 We recall, in this regard, our findings in our preliminary ruling in Annex E -1 that the
complainants' panel requests, including that of Brazil, define the measures at issue as federal-level
export subsidies pertaining to sugar or sugarcane.315 We understand that such federal-level export
subsidies include, inter alia, the Production Assistance Scheme, the Buffer Stock Scheme, and the
Marketing and Transportation Scheme. These schemes are implemented on a seasonal basis through
a number of legal instruments. In particular, the complainants submitted evidence with respect to
the Production Assistance Scheme for the 2015 -16316, 2017-18317, and 2018-19 sugar seasons.318
Similarly, the complainants provided evidence with respect to the Buffer Stock Scheme for the
2018-19 ("Buffer Stock Scheme 2018") 319 and 2019 -20 ("Buffer Stock Scheme 2019") 320 sugar
seasons. Brazil's panel request also identifies some of these pieces of evidence as legal instruments
that implement the measures at issue.321
7.119. In this connection, we recall our understanding of the difference between measures and legal
instruments, set out in our preliminary ruling in Annex E -1. As explained there, the measures at
issue as set out in the panel request, together with a summary of the legal basis of the complaint,
define a panel's terms of reference. By contrast, legal instruments usually constitute evidence of the
existence and operation of a particular measure. 322 A panel has to make findings regarding the
WTO-consistency of the measures at issue, which may not necessarily be coterminous with the legal
instruments that implement such measures.
7.120. In line with the approach suggested by Australia and Guatemala, and in accordance with
Brazil's identification of the measures at issue in its panel request, we consider it appropriate to
make findings on the WTO -consistency of the subsidy scheme s that form part of India's alleged
federal-level subsidies contingent on export performance, namely, the Production Assistance
Scheme, the Buffer Stock Scheme, and the Marketing and Transportation Scheme. As part of our
assessment of the WTO-consistency of these schemes, we will determine their design and operation
by examining the legal instruments that implement them in different sugar seasons. After assessing
the claims brought by all complainants with respect to these three schemes, we will examine the
WTO-consistency of the DFIA Scheme for sugar, which is challenged by Australia only.

311 In response to a question from the Panel, Guatemala clarified that it does not consider the Buffer Stock
Scheme 2018 and the Buffer Stock Scheme 2019 to be stand-alone measures. Rather, in Guatemala's view, they
are part of the legal instruments that implement India's federal-level export subsidies. Guatemala explained that,
given the proximity of these two Schemes, it would not object to the Panel making findings with respect to the
Buffer Stock Schemes collectively. (Guatemala's response to Panel question No. 80, paras. 84-89)
312 Guatemala's first written submission, paras. 192, 200, 240; second written submission, para. 54.
313 In the alternative, Guatemala submits that the schemes at issue are domestic support measures that
directly or indirectly benefit sugarcane growers and, as such, should be included in the calculation of India's AMS
to sugarcane producers. (Guatemala's first written submission, para. 195)
314 In its first written submission, Brazil itself draws a distinction between the schemes that existed at the
time of the establishment of the Panel and the expired schemes. (Brazil's first written submission, Sections IV.C.1
and IV.C.2)
315 See Annex E-1.
316 Notification of 2 December 2015, (Exhibit JE-76).
317 Notification of 9 May 2018, (Exhibit JE-75).
318 Notification of 5 October 2018, (Exhibit JE-74).
319 Notification of 15 June 2018, (Exhibit JE-78), para. 1.
320 Notification of 31 July 2019, (Exhibit JE-77), preamble.
321 See Brazil's panel request, para. 14. Brazil's panel request does not refer to the Buffer Stock
Scheme 2019. However, since we consider the Buffer Stock Scheme 2019 to be a legal instrument and not a
measure at issue, we do not find the absence of a reference to it in Brazil's panel request problematic.
322 See Annex E-1.
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7.2.2 Measures at issue
7.121. As noted, the complainants challenge India's federal -level measures pertaining to sugar or
sugarcane.323 In particular, all complainants take issue with three alleged assistance schemes:
(i) the Production Assistance Scheme, which operates jointly with the MIEQs; (ii) the Buffer Stock
Scheme, which operates jointly with the MIEQs; and (iii) the Marketing and Transportation Scheme,
which operates jointly with the MAEQ. In addition, Australia challenges the DFIA Scheme, which is
not linked to the MIEQs or the MAEQ.
7.122. The complainants explain that the MIEQs and the MAEQ alone do not provide subsidies
contingent on export performance. 324 Rather, the complainants take issue with "India's recurring
policy of tying MIEQ and MAEQ export quotas to various direct payment schemes, in a manner that
causes those payments to be export subsidies". 325 Accordingly, the complainants consider that the
combined operation of the Production Assistance Scheme, Buffer Stock Scheme, and Marketing and
Transportation Scheme with the MIEQs and the MAEQ constitutes subsidies contingent on export
performance.326
7.123. This section provides an overview of the MIEQs and the MAEQ, as well as the alleged export
subsidy schemes challenged by the complainants.327
7.2.2.1 MIEQs and MAEQ
7.124. We recall that "MIEQs" stand for "Minimum Indicative Export Quotas" and that "MAEQ"
stands for "Maximum Admissible Export Quantity". The MIEQs and the MAEQ are adopted through
orders issued by the Department of Food and Public Distribution (DFPD), which is part of the Ministry
of Consumer Affairs, Food and Public Distribution .328 The MIEQ orders allocate to sugar mills
minimum sugar export quotas, whereas the MAEQ allocates maximum sugar export quotas, on a
per-mill basis.
7.125. The legal basis for the MIEQ and MAEQ orders is found in the Essential Commodities Act 1955
and the Sugar (Control) Order 1966.329 Specifically, Section 3 of the Essential Commodities Act
authorizes the Central Government to issue orders for the control of the production, supply and
distribution of certain commodities.330 Clause 5 of the Sugar (Control) Order enables the Central
Government to issue general or special orders to sugar producers, importers or dealers to regulate,
among others, production, maintenance of stocks, storage, sales, delivery and distribution of any
kind of sugar.331 Clause 14 of the Sugar (Control) Order provides that compliance with the orders
issued pursuant to the Sugar (Control) Order is mandatory.332

323 Brazil's panel request, para. 14; Australia's panel request, para. 19 and para. 9 of Annex A thereto;
Guatemala's panel request, para. 9 and para. 9 of the Annex thereto.
324 Australia's first written submission, para. 219; Guatemala's first written submission, para. 207.
325 Australia's first written submission, para. 219. See also Brazil's first written submission, paras. 172
and 177.
326 Australia's first written submission, paras. 220-221; Guatemala's first written submission, para. 207.
327 India stated that it agrees with the complainants' f actual descriptions of the measures at issue to the
extent they reflect the text of the relevant instruments. (India's response to Panel question No. 29)
328 Australia's first written submission, para. 225; Guatemala's first written submission, para. 202; India's
response to Panel question No. 31.
329 Brazil's first written submission, para. 202; Australia's first written submission, paras. 224 -225;
Guatemala's first written submission, paras. 202-203 (referring to Clause 5 of the Sugar (Control) Order, 1966,
(Exhibit JE-44)); and India's response to Panel question No. 31.
330 Section (3E) of the Essential Commodities Act states:
Central Government may, from time to time, by general or special order, direct any producer or
importer or exporter or recognised dealer or any class of producers or recognised dealers, to take
action regarding production, maintenance of stocks, storage, sale, grading, packing, marking,
weighment, disposal, delivery and distribution of any kind of sugar in the manner specified in the
direction.
(Exhibit JE-43, Section (3E))
331 Sugar (Control) Order, 1966, (Exhibit JE-44), Clause 5, p. 42.
332 Sugar (Control) Order, 1966, (Exhibit JE-44), Clause 14, pp. 47 -48. Moreover, Section 7 of the
Essential Commodities Act provides for fines or imprisonment for violations of the orders issued under the
authority granted pursuant to its Section (3E). (Exhibit JE-43, Section 7)
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7.126. The MIEQs are determined "[i]n view of the inventory levels within the sugar industry and
to facilitate achievement of financial liquidity" .333 The MIEQs allocate a total minimum quantity of
sugar that must be exported and distribute that quantity among individual sugar mills operating in
India (mill-wise allocations).334
7.127. The MIEQs are issued on a seasonal basis. The complainants submit evidence on the MIEQs
for the 2015-16335, 2017-18336, and 2018-19337 sugar seasons. The total amount of the MIEQ for all
sugar mills was 4 million tonnes of sugar for the 2015-16 season338; 2 million tonnes for the 2017-18
season339; and 5 million tonnes for the 2018-19 season.340 To demonstrate compliance with their
individual MIEQ allocations, sugar mills are required to provide the DFPD with supporting documents,
such as shipping bills and agreements between the sugar mill and the exporter.341
7.128. As explained below, the Production Assistance and Buffer Stock Schemes are linked to the
MIEQ orders. Specifically, compliance with the MIEQ orders is an e ligibility criterion for receiving
assistance under all seasonal iterations of the Production Ass istance Scheme and the Buffer Stock
Scheme 2018.342
7.129. In the 2019 -20 sugar season, India introduced the MAEQ, which imposes the maximum
admissible export quantity of sugar at 6 million ton nes.343 Like the MIEQs, the MAEQ was adopted
through a DFPD order. The MAEQ order contains an Annex that lists the amount of MAEQ allocated
to each sugar mill in India.344 The MAEQ order is linked to the Marketing and Transportation Scheme
such that to become elig ible to receive assistance under that Scheme, a sugar mill is required to
export at least 50% of its MAEQ allocation.345
7.2.2.2 Production Assistance Scheme
7.130. Under the Production Assistance Scheme, the government provides assistance to sugar mills
on a seasonal bas is. The assistance is provided through notifications issued by the DFPD. The
complainants submitted evidence with respect to the Production Assistance Scheme for the
2015-16346, 2017-18,347 and 2018-19 sugar seasons.348
7.131. The purpose of the Production Assistance Scheme is "to offset the cost of cane and facilitate
timely payment of cane price dues of farmers" for the relevant sugar season.349 The assistance thus
has to be used for the payment of cane price dues of farmers related to the FRP.350 Mills are required
to submit a utilization certificate to demonstrate that the assistance has been used for this

333 MIEQ Order of 28 March 2018, (Exhibit JE-107), preamble; MIEQ Order of 28 September 2018,
(Exhibit JE-108), preamble; and MIEQ Order of 18 September 2015, (Exhibit JE-109), preamble.
334 The mill-wise allocations are contained in an annex to each MIEQ Order. (See Exhibits JE-108, JE-109,
and JE-111)
335 MIEQ Order of 18 September 2015, (Exhibit JE-109).
336 MIEQ Order of 28 March 2018, (Exhibit JE-107).
337 MIEQ Order of 28 September 2018, (Exhibit JE-108).
338 MIEQ Order of 18 September 2015, (Exhibit JE-109), para. 1.
339 MIEQ Order of 28 March 2018, (Exhibit JE-107), para. 1; Notification of 9 May 2018, (Exhibit JE-111),
para. 2.
340 MIEQ Order of 28 September 2018, (Exhibit JE-108), para. 1.
341 MIEQ Order of 28 September 2018, (Exhibit JE-108), para. 4. See also MIEQ Order of 28 March 2018,
(Exhibit JE-107), para. 3 and MIEQ Order of 18 September 2015, (Exhibit JE-109), para. 3.
342 See paras. 7.133 and 7.138 below.
343 Cabinet Committee on Economic Affairs Announcement of Sugar export policy for evacuation of surplus
stocks during sugar season 2019-20, (Exhibit JE-113).
344 MAEQ Order of 16 September 2019, (Exhibit JE-115), Annexure.
345 Notification of 12 September 2019, ( Exhibit JE-114), para. 2(a). See also MAEQ Order of
16 September 2019, (Exhibit JE-115).
346 Notification of 2 December 2015, (Exhibit JE-76).
347 Notification of 9 May 2018, (Exhibit JE-75).
348 Notification of 5 October 2018, (Exhibit JE-74).
349 Notification of 2 December 2015, ( Exhibit JE-76), preamble and para. 1; Notification of 9 May 2018,
(Exhibit JE-75), preamble and para. 1; and Notification of 5 October 2018, (Exhibit JE-74), preamble and para. 1.
350 Notification of 2 December 2015, ( Exhibit JE-76), p aras. 1 and 2.v ; Notification of 9 May 2018,
(Exhibit JE-75), paras. 1 and 3(iii); and Notification of 5 October 2018, (Exhibit JE-74), paras. 1 and 3(iii).
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purpose.351 The assistance is paid directly to farmers on behalf of sugar mills.352 To this end, sugar
mills are required to open separate no -lien bank accounts to which farmers have access and into
which the DFPD deposits the monies.353 Any remaining balance is credited to the account of the
sugar mill itself.354
7.132. The amount of assistance is calculated either based on the actual volume of sugarcane the
mills crushed in the relevant sugar season or based on their average sugar production over the
previous three sugar seasons, whichever is lower.355 The rate of the production subsidy was INR 4.50
per quintal of sugarcane crushed in the 2015-16 sugar season356, INR 5.50 per quintal of sugarcane
crushed in the 2017 -18 sugar season 357, and INR 13.88 per quintal of sugarcane crushed in the
2018-19 sugar season.358
7.133. With respect to the eligibility for the subsidy, the Notifications for the 2017-18 and 2018-19
sugar seasons stipulate that "[t]he mill should have fully complied with all the orders/directives of
[the DFPD] to the sugar mills" for the relevant sugar season. 359 Similarly, the Notification for the
2015-16 sugar season states that mills that have achieved at least 80% of their MIEQ target shall
be eligible for the production subsidy.360
7.2.2.3 Buffer Stock Scheme
7.134. Under the Buffer Stock Scheme, sugar mills receive a subsidy for the quantity of buffer stock
maintained. In support of their assertions regarding this scheme, the complainants provide the
Notifications implementing the Buffer Stock Scheme for the 2018-19 and 2019-20 sugar seasons.361
7.135. The Buffer Stock Scheme was introduced "with a view to improve liquidity of the sugar
industry; enabling them to clear cane price arrears of farmers and to stabilize [the] domestic sugar
price".362 Similarly, with respect to the purpose of the assistance, the Buffer Stock Scheme states
that "[t]he funds to be provided to the sugar mills as reimbursement of the carrying cost towards
maintenance of the buffer stock are to be used firstly for payment of cane price dues of farmers for
the current sugar season … [and] for arrears of previous sugar seasons."363
7.136. The Buffer Stock Scheme 2019 provides for sugar mills storing a buffer stock of 4 million
tonnes of sugar, which is divided into mill -wise allocations.364 Every sugar mill "shall set apart the
quantity allocated as buffer stock and store it in separate and distinctly identifiable lots and stock

351 Notification of 2 December 2015, (Exhibit JE-76), para. 3; Notification of 9 May 2018, (Exhibit JE-75),
352 Notification of 2 December 2015, (Exhibit JE-76), para. 2.ii; Notification of 9 May 2018, (Exhibit JE-75),
353 Notification of 2 December 2015, ( Exhibit JE-76), para. 2.v ; Notification of 5 October 2018 ,
(Exhibit JE-74), para. 3(v); and Notification of 9 May 2018, (Exhibit JE-75), para. 3(iv).
354 Notification of 2 December 2015, ( Exhibit JE-76), paras. 2.ii and 2.vi; Notification of 9 May 2018,
(Exhibit JE-75), para. 3(iv); and Notification of 5 October 2018, (Exhibit JE-74), para. 3(iv).
355 Notification of 2 December 2015, (Exhibit JE-76), para. 2.i; Notification of 9 May 2018, (Exhibit JE-75),
356 Notification of 2 December 2015, (Exhibit JE-76), para. 2.i.
357 Notification of 9 May 2018, (Exhibit JE-75), para. 3(i).
358 Notification of 5 October 2018, (Exhibit JE-74), para. 3(i).
359 Notification of 9 May 2018, ( Exhibit JE-75), p ara. 2(c) ; and Notification of 5 October 2018,
(Exhibit JE-74), para. 2(c).
360 Notification of 2 December 2015, (Exhibit JE-76), p. 1, para. 2.iii.
361 Notification of 15 June 2018, ( Exhibit JE-78); and Notification of 31 July 2019, (Exhibit JE-77). The
Buffer Stock Scheme 2019 replicates the provisions of the Buffer Stock Scheme 2018 to a great extent.
362 Notification of 31 July 2019, (Exhibit JE-77), preamble; and Notification of 15 June 2018,
(Exhibit JE-78), p.1, preamble.
363 Notification of 31 July 2019, (Exhibit JE-77), para. 1; and Notification of 15 June 2018, (Exhibit JE-78),
para. 1.
364 Notification of 31 July 2019, (Exhibit JE-77), preamble; and Order of 26 July 2019, (Exhibit JE 127).
Likewise, the Buffer Stock Scheme 2018 provided for sugar mills storing an overall quantity of 3 million tonnes
of sugar, which was divided into mill -wise allocations. (Notification of 15 June 2018, (Exhibit JE-78), preamble;
Order of 29 June 2018, (Exhibit JE-123))
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within the mill premises".365 A mill may opt for a partial quantity of the offered quota, but it would
not be allowed to increase its quota subsequently.366
7.137. The extent of assistance is determined based on the value of the buffer stock held. The rate
for determining the value of stock was INR 29 and INR 31 per kg of sugar under Buffer Stock Scheme
2018 and Buffer Stock Scheme 2019, respectively.367
7.138. To be eligible for assistance, a sugar mill must have: (i) maintained the allocated buffer
stock for the entire period (in full or in part, unless permitted to dismantle it); (ii) submitted the
utilization certificates in respect of buffer stock subsid ies disbursed for earlier quarters; (iii) filed
timely monthly statutory returns relating to data on sugarcane crushing, sugar production, stocks,
etc.; and (iv) fully complied with the DFPD's orders/directives issued in the 2017-18 and 2018-19
sugar seasons regarding the minimum selling price for sugar and maintaining minimum stocks of
sugar after sales of the maximum specified quantity for the month of June 2018 , as well as similar
orders to be issued in subsequent period s.368 In addition to these requirements, the Buffer S tock
Scheme 2018 requires sugar mills "to fully comply with all orders/directives issued by [DFPD] for
compliance during 2018-19 sugar season".369
7.139. With respect to the allocation of buffer stock subsidies, the Buffer Stock Scheme 2019
provides:
The Central Government shall make mill -wise allocation of buffer stock having regard
to the stock held by it. In case a sugar mill has failed to export any quantity up to June,
2019 against the MIEQ issued vi[a] directive dated 28.09.2018 of DFPD, its stock shall
be considered after deducting the quantity equivalent to its allocated MIEQ.370
7.2.2.4 Marketing and Transportation Scheme
7.140. On 12 September 2019, India introduced the Marketing and Transportation Scheme. With
respect to the purpose of the assistance, the Marketing and Transportation Scheme states that "[t]he
funds to be provided as assistance to facilitate export [are] to be used for payment of cane price
dues of farmers for the sugar season 2019 -20 and cane price arrears of previous sugar seasons, if
any."371
7.141. Under the Marketing and Transportation Scheme, the Central Government provides a "lump
sum assistance for expenses on export of sugar limited to MAEQ of sugar mills for the sugar season
2019-20, in the following manner ": (i) for "marketing including handl ing, quality up -gradation,
debagging [and] re-bagging and other processing costs etc.", an amount of INR 4400 per tonne; (ii)
for "internal transport and freight charges including loading, unloading, and fobbing etc.", an amount
of INR 3428 per tonne; and (iii) for "ocean freight against shipment from Indian ports to the ports
of destination countries etc.", an amount of INR 2620 per tonne of sugar.372
7.142. The Marketing and Transportation Scheme further provides that "the assistance ... would
not be reimbursement but assistance" for the expenses incurred under the above -mentioned

365 Notification of 31 July 2019, (Exhibit JE-77), para. 2; and Notification of 15 June 2018, (Exhibit JE-78),
para. 2.
366 Notification of 31 July 2019, (Exhibit JE-77), para. 2; and Notification of 15 June 2018, (Exhibit JE-78),
para. 2.
367 Notification of 31 July 2019, (Exhibit JE-77), para. 3(d); and Notification of 15 June 2018,
(Exhibit JE-78), para. 3(d).
368 Notification of 31 July 2019, ( Exhibit JE-77), para. 2. See also Notification of 15 June 2018,
(Exhibit JE-78), para. 4.
369 Notification of 31 December 2018, (Exhibit JE-112), p. 1.
370 Notification of 31 July 2019, (Exhibit JE-77), para. 2.
371 Notification of 12 September 2019, (Exhibit JE-114), para. 1. Similarly, the preamble to the Marketing
and Transportation Scheme states that the assistance is provided "with a view to facilitate[ing] export of sugar
during the sugar season 2019-20 … thereby improving the liquidity position of sugar mills enabling them to clear
cane price dues of farmers for sugar season 2019 -20". Paragraph 5 also states that "[t]he assistance is to be
used for payment of cane price dues of farmers for the sugar season 2019-20 and cane price arrears of previous
sugar seasons, if any." (Ibid. preamble, para. 5)
372 Notification of 12 September 2019, (Exhibit JE-114), para. 3(i).
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categories.373 Sugar mills are not entitled to claim assistance on any other expenses, or beyond the
prescribed rate.374
7.143. To ensure that the assistance is directly credited into the account s of farmers, sugar mills
must open separate no-lien accounts and furnish to the bank the details and extent of the sugarcane
price dues for the 2019 -20 and previous sugar seasons. The bank shall credit the amounts of
assistance directly into the accounts of farmers "on behalf of mills against cane dues payable and
subsequent balance, if any, shall be credited into mill's account ".375 Sugar mills must submit
utilization certificates confirming that the subsidy was used for the payment of farmers' sugarcane
price dues within three months from the date of the payment of the subsidy.376
7.144. Eligibility to claim assistance is conditioned, inter alia, upon mills exporting at least 50% of
their MAEQ allocations. Specifically, the Marketing and Transportation Scheme provides:
The Sugar mills should have exported sugar up to the extent of their Maximum
Admissible Export Quantity (MAEQ) determined by the Central Government for such
mills for the sugar season 2019-20, either themselves or through a merchant exporter.
However, to become eligible to get assistance a sugar mill would be required to export
at least 50% of its MAEQ.377
7.145. On 16 September 2019, the DFPD determined the MAEQ for each sugar mill.378
7.2.2.5 Duty Free Import Authorization (DFIA) Scheme
7.146. The DFIA Scheme is set out in the Foreign Trade Policy 2015 -2020 issued by the Central
Government on 1 April 2015. 379 Chapter 4 of the Foreign Trade Policy , titled "Duty
Exemption/Remission Schemes" provides that "[s]chemes under this Chapter enable duty free
import of inputs for export production."380 The DFIA Scheme is one such duty exemption scheme.
7.147. The DFIA Scheme provides for issuance of authorizations to allow duty free imports of inputs
that are to be used for production of goods for exports .381 Authorization under the DFIA Scheme
provides exemption from payment of the basic customs duty. 382 The DFIA is issued "on [a]
post-export basis for products for which Standard Input Output Norms have been notified".383
7.148. As a result of the amendments to the Foreign Trade Policy introduced in March 2018384,
sugar mills that exported white sugar between 28 March 2018 and 30 September 2018 are eligible
to import raw sugar duty-free between 1 October 2019 and 30 September 2021.385
7.149. The DFIA can be transferred from one entity to another. To that end, a DFIA holder may
request the issuance of a transferrable DFIA from a regional authority. Such requests can be made

373 Notification of 12 September 2019, (Exhibit JE-114), para. 3(iii).
374 Notification of 12 September 2019, (Exhibit JE-114), para. 3(iii).
375 Notification of 12 September 2019, (Exhibit JE-114), para. 5(ii).
376 Notification of 12 September 2019, (Exhibit JE-114), para. 6.
377 Notification of 12 September 2019, (Exhibit JE-114), para. 2(a). Sugar mills can submit their claims
for assistance in two tranche s. The first claim can be submitted after the sugar mill has exported at least 50%
of its MAEQ. (Ibid. para. 4(i))
378 MAEQ Order of 16 September 2019, (Exhibit JE-115).
379 Foreign Trade Policy 2015-2020, (Exhibit AUS-40).
380 Foreign Trade Policy 2015-2020, (Exhibit AUS-40), para. 4.00.
381 Foreign Trade Policy 2015-2020, (Exhibit AUS-40), para. 4.25(a).
382 Foreign Trade Policy 2015-2020, (Exhibit AUS-40), para. 4.26(i).
383 Foreign Trade Policy 2015-2020, (Exhibit AUS-40), para. 4.27(i).
384 Amendment to the Foreign Trade Policy 2015-2020, (Exhibit AUS-41).
385 Paragraph 4.25(c) of the Foreign Trade Policy reads:
Export of white sugar under DFIA is allowed under SION SI.No-E 52 till 30.9.2018 and DFIA in
such cases shall be issued only on or after 1.10.2019. Such DFIAs shall be valid for imports till
30.9.2021.
(Amendment to the Foreign Trade Policy 2015-2020, (Exhibit AUS-41))
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within a period of 12 months from the date of export or six months from the date of realization of
export proceeds, whichever is later.386
7.2.3 Order of analysis
7.150. As noted above 387, Australia and Guatemala raise claims under both the Agreement on
Agriculture and the SCM Agreemen t. In this section, we address the relationship between the two
Agreements and our order of analysis.
7.151. Both the Agreement on Agriculture and the SCM Agreement contain disciplines regulating
export subsidies. While the Agreement on Agriculture regulates expo rt subsidies for agricultural
products, the SCM Agreement contains general disciplines on export subsidies. Article 1(e) of the
Agreement on Agriculture defines export subsidies as " subsidies contingent upon export
performance, including the export subsidies listed in Article 9" of that Agreement. Article 9.1 of the
Agreement on Agriculture, in turn, lists subsidies that are subject to reduction commitments .
Article 3.1(a) of the SCM Agreement prohibits subsidies contingent upon export performance,
"[e]xcept as provided in the Agreement on Agriculture".388
7.152. Article 21.1 of the Agreement on Agriculture, which governs the relationship between the
Agreement on Agriculture and other Agreements in Annex 1A to the WTO Agreement, states:
The provisions of GATT 1994 and of other Multilateral Trade Agreements in Annex 1A
to the WTO Agreement shall apply subject to the provisions of this Agreement.
7.153. The SCM Agreement is contained in Annex 1A to the WTO Agreement. Accordingly, the SCM
Agreement applies "subject to the provisions" of the Agreement on Agriculture.
7.154. An export subsidy for agricultural products can, in principle, be subject to both the
Agreement on Agriculture and the SCM Agreement. However, pursuant to Article 21.1 389, in the
event of a conflict between the two Agreements, the disciplines of the Agreement on Agriculture
would prevail over those of the SCM Agreement.390 Accordingly, if an export subsidy were prohibited
under the SCM Agreement but permitted under the Agreement on Agriculture, giving rise to a
conflict, that measure would be WTO-consistent because the Agreement on Agriculture would prevail
over the SCM Agreement. By contrast, if an export subsidy were prohibited under both the
Agreement on Agriculture and the SCM Agreement, no conflict would arise, and the measure would
be inconsistent with both Agreements.
7.155. Consequently, the WTO -consistency of an alleged export subsidy for agricultural products
has to be examined, in the first place, under the Agreement on Agriculture, followed by the
SCM Agreement, if necessary. 391 We will follow this order of analysis in our examination of the
complainants' claims.

386 India's response to Panel question No. 86.a ; Foreign Trade Policy 2015 -2020, ( Exhibit AUS-40),
para. 4.29(iv).
387 See paras. 7.116-7.117 above.
388 Furthermore, Article 1.1 of the SCM Agreement provides that "a subsidy shall be deemed to exist
if … there is a financial contribution by a government or any public body within the territory of a Member … and
… a benefit is thereby conferred."
389 Furthermore, the opening clause of Article 3.1 of the SCM Agreement provides that the subsidies
referred to in paragraphs (a) and (b) of that provision shall be prohibited "[e]xcept as provided in the
Agreement on Agriculture".
390 This could be the case, for example, where "there is an explicit authorization in the text of the
Agreement on Agriculture that would authorize a measure that, in the absence of such an express authorization,
would be prohibited by Article 3.1(b) of the SCM Agreement". (Appellate Body Report, US – Upland Cotton,
391 Appellate Body Reports, Canada – Dairy (Article 21.5 – New Zealand and US) , para. 123; and
US - Upland Cotton, para. 570.
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7.2.4 Claims under the Agreement on Agriculture
7.2.4.1 Introduction
7.156. The complainants argue that, because India has no export subsidy reduction commitmen ts
in its Schedule, and consequently no export subsidy entitlements, its measures are inconsistent with
the obligations set forth in Articles 3.3 and 8 of the Agreement on Agriculture.392
7.157. Brazil and Australia submit that India's assistance schemes are subsi dies contingent on
export performance within the meaning of Article 9.1(a) of the Agreement on Agriculture.393 For its
part, Guatemala argues that India's assistance schemes constitute an export sub sidy under
Articles 9.1(a) and (c) of the Agreement on Agriculture.394
7.158. In the alternative, Australia claims that, if the Panel were to find that the four assistance
schemes challenged by Australia do not fall within the scope of Article 9.1(a), these schemes would
be inconsistent with India's obligations under Articles 8 and 10.1 of the Agreement on Agriculture.395
Guatemala argues that, if the Panel were to find that the production subsidies and buffer stock
subsidies are not export contingent, they would constitute domestic support measures and should
be included in the calculation of India's AMS for sugarcane.396
7.159. In response, India argues, first, that the complainants have failed to demonstrate the
existence of a financial contribution and benefit with respect to all challenged schemes .397 In
particular, India submits that " the complainants have not met their burden to demonstrate [the]
'making' of [a] financial contribution such that they can show [that] there is a financial
contribution".398 India further submits that the complainants failed to identify any benchmark in a
relevant market to demonstrate the existence of a benefit and have merely presumed that a benefit
exists.399
7.160. Furthermore, India maintains that, as a developing country, it is entitl ed to grant export
subsidies for marketing and transportation costs in accordance with Article 9.4 of the Agreement on
Agriculture.400 India submits that the Marketing and Transportation Scheme falls within the scope of
Articles 9.1(d) and 9.1(e) of the A greement on Agriculture and is therefore permitted under
Article 9.4 of that Agreement.401
7.161. Finally, India considers that the DFIA Scheme does not constitute a subsidy. In this respect,
India points out that, pursuant to footnote 1 to the SCM Agreement, an exemption or remission of
duties and taxes levied on like products destined for domestic consumption is not a subsidy, to the
extent that it does not constitute an "excess remission". 402 According to India, th e DFIA Scheme
falls under the scope of footnote 1 of the SCM Agreement, read together with paragraph (i) of
Annex I to the SCM Agreement, and therefore does not constitute a subsidy within the meaning of
the Agreement on Agriculture.403
7.162. We begin by providing an overview of relevant provisions of the Agreement on Agriculture.
Then we will determine whether India's Schedule contains export subsidy reduction commitments.
Thereafter, we will examine whether each of the four assistance scheme s identified by the
complainants is inconsistent with the Agreement on Agriculture.

392 Brazil's first written submission, para. 169; Australia's first written submission, para. 285; Guatemala's
first written submission, para. 193
393 Brazil's first written submission, para. 169; Australia's first written submission, para. 286.
394 Guatemala's first written submission, para. 193.
395 Australia's first written submission, para. 367.
396 Guatemala's first written submission, para. 195.
397 India's first written submission, para. 110; response to Panel question No. 39.
398 India's first written submission, para. 107; response to Panel question No. 39. (emphasis and
underlining original) See also India's second written submission, paras. 70-89.
399 India's first written submission, para. 112; second written submission, paras. 90-97.
400 India's first written submission, para. 103.
401 India's first written submission, para. 116; second written submission, paras. 98-106.
402 India's first written submission, paras. 97-98.
403 India's first written submission, paras. 124-125; second written submission, paras. 107-110.
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7.2.4.2 Overview of the relevant provisions
7.163. We consider it useful to begin by providing an overview of the provisions of the Agreement
on Agriculture relevant to the export subsidy claims in these disputes.
7.164. Article 1(e) of the Agreement on Agriculture defines the term "export subsidies" as "subsidies
contingent upon export performance, including the export subsidies listed in Article 9 of this
Agreement". The rules governing export competition are set out in Articles 3, 8, 9 , and 10 of the
Agreement on Agriculture.
7.165. Article 8 limits the export subsidies that a Member can provide to those that are consistent
with the provisions of the Agreement on Agriculture and with that Member's Schedule.404
Accordingly, a Member providing an export subsidy that is inconsistent with the Agreement on
Agriculture and its own Schedule will act inconsistently with Article 8.
7.166. The level of export subsidies that a Member can provide is determined by what is inscribed
in that Member's S chedule. In this regard, Article 3.1 of the Agreement on Agriculture states that
"export subsidy commitments in Part IV of each Member's Schedule constitute commitments limiting
subsidization and are hereby made an integral part of GATT 1994.".
7.167. Article 3.3 distinguishes between two types of commitments with respect to export
subsidies:
Subject to the provisions of paragraphs 2(b) and 4 of Article 9, a Member sha ll not
provide export subsidies listed in paragraph 1 of Article 9 in respect of the agricultural
products or groups of products specified in Section II of Part IV of its Schedule in excess
of the budgetary outlay and quantity commitment levels specified therein and shall not
provide such subsidies in respect of any agricultural product not specified in that Section
of its Schedule.
7.168. Under the first part of Article 3.3, Members have committed not to provide export subsidies
listed in Article 9.1 in respect o f scheduled agricultural products405 in excess of budgetary outlays
and quantity commitment levels specified in the relevant Member's Schedule. Article 9.1 of the
Agreement on Agriculture refers to scheduled agricultural product commitments as "reduction
commitments". Under the second part of Article 3.3, Members have committed not to provide any
export subsidies listed in Article 9.1 with respect to unscheduled agricultural products, i.e. those
that are not specified in the Member's Schedule. Article 3.3 thus prohibits providing export subsidies
within the meaning of Article 9.1 on unscheduled agricultural products.406
7.169. As noted above, the Agreement on Agriculture distinguishes between the commitments for
scheduled and unscheduled products. Therefore, to determine a Member's commitment with respect
to export subsidies on a n agricultural product, it has to be established whether the agricultural
product in question is included in Section II of Part IV of the Member's Schedule and , if so, what
commitment has been undertaken therein for that product.
7.170. Article 3.3 applies "subject to" the provisions of Articles 9.2(b) and 9.4, which provide two
further avenues for Members to grant export subsidies in conformity with the Agreement on
Agriculture. Article 9.4 , which is relevant to these disputes, stipulates that, "[d] uring the
implementation period, developing country Members sh all not be required to undertake
commitments in respect of the export subsidies listed in subparagraphs (d) and (e) of paragraph 1
above, provided that these are not applied in a manner that would circumvent reduction
commitments." The subsidies referred to in paragraphs (d) and (e) of Article 9.1 of the Agreement
on Agriculture are:
(d) the provision of subsidies to reduce the costs of marketing exports of agricultural
products (other than widely available export promotion and advisory services) including

404 Article 8, titled "Export Competition Commitments", reads:
Each Member undertakes not to provide export subsidies otherwise than in conformity wit h this
Agreement and with the commitments as specified in that Member’s Schedule.
405 Scheduled agricultural products are those specified in Section II of Part IV of Members' Schedules.
406 Appellate Body Report, US – FSC, paras. 145-146.
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handling, upgrading and other processing costs, and the costs of international transport
and freight; and
(e) internal transport and freight charges on export shipments, provided or mandated
by governments, on terms more favourable than for domestic shipments[.]
7.171. Paragraph 1 of Article 9 of the Agreement on Agriculture, titled "Export Subsidy
Commitments", lists the kinds of export subsidies that are subject to reduction commitments (for
scheduled products) or are inconsistent (for unscheduled products) with Article 3.3. The
complainants allege that India grants export subsidies within the meaning of Articles 9.1(a) and (c),
which read:
1. The following export subsidies are subject to reduction commitments under this
Agreement:
(a) the provision by governments or their agencies of direct subsidies,
including payments-in-kind, to a firm, to an industry, to producers of an
agricultural product, to a cooperative or other association of such
producers, or to a marketing board, contingent on export performance;
…
(c) payments on the export of an agricultural product that are financed
by virtue of governmental action, whether or not a charge on the public
account is involved, including payments that are financed from the
proceeds of a levy imposed on the agricultural product concerned or on an
agricultural product from which the exported product is derived[.]
7.172. Article 9.1(a) provides that direct subsidies that are contingent on export performance are
subject to reduction commitments under the Agreement on Agriculture. Article 9.1(c) stipulates that
payments on exports financed by virtue of governmental action are also subject to reduction
commitments under the Agreement on Agriculture.
7.173. As noted, the inconsistency of export subsidi es with Article 3.3 relates only to the export
subsidies listed in Article 9.1. All other subsidies contingent upon export performance, as defined in
Article 1(e) of the Agreement , are subject to the provisions of Article 10 .407 Article 10.1, which is
designed to prevent circumventi on of export subsidy commitments , does not permit granting of
export subsidies not listed in Article 9.1 in a way that would lead, or threaten to lead, to the
circumvention of export subsidy commitments. It also stipulates that no n-commercial transactions
should not be used to circumvent export subsidy commitments.408
7.2.4.3 India's export subsidy commitments
7.174. As observed above, pursuant to Article 3.3 of the A greement on Agriculture , the level at
which India can provide export subsidies listed in Article 9.1 depends on whether India's Schedule
contains an export subsidy reduction commitment.
7.175. The parties agree that sugar is an unscheduled agricultural product for India. 409 Our own
review of India's Schedule and Supporting Tables also demonstrates that India did not make export

407 Article 10.1, titled "Prevention of Circumvention of Export Subsidy Commitments", reads:
Export subsidies not listed in paragraph 1 of Article 9 shall not be applied in a manner which results
in, or which threatens to lead to, circumvention of export sub sidy commitments; nor shall
non-commercial transactions be used to circumvent such commitments.
408 In US – FSC, the Appellate Body understood the term "export subsidy commitments" to have "a wider
reach [than reduction commitments] that covers commitments a nd obligations relating to both scheduled and
unscheduled agricultural products". (Appellate Body Report, US – FSC, para. 147)
409 Brazil's first written submission, paras. 183-184; Australia's first written submission, paras. 248-251;
Guatemala's first written submission, paras. 256-257; India's response to Panel question No. 38.
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subsidy reduction commitments with respect to sugar. 410 As a result, if we find that India provides
export subsidies within the meaning of Article 9.1 of the Agreement on Agriculture, these subsidies
would be inconsistent with Articles 3.3 and 8 of that Agreement.
7.176. We proceed to examine whether the alleged subsidy schemes identified by the complainants
fall under Articles 9.1(a) and (c) of the Agreement on Agriculture. As a threshold issue, however,
we first address India's contention that the Marketing and Transportation Scheme is permitted under
Article 9.4 of the Agreement on Agriculture.
7.2.4.4 Whether the Marketing and Transportation Scheme falls under Ar ticle 9.4 of the
Agreement on Agriculture
7.2.4.4.1 Introduction
7.177. As noted above, the complainants claim, inter alia, that India's Marketing and Transportation
Scheme is inconsistent with Articles 9.1(a) and (c) of the Agreement on Agriculture. In response,
India submits that the Marketing and Transportation Scheme falls within the scope of Articles 9.1(d)
and (e) of the Agreement on Agriculture and is therefore permitted under Article 9.4 of that
Agreement.411
7.178. In addressing the parties ' claims and arguments, we consid er it appropriate to examine,
first, whether the Marketing and Transportation Scheme falls within the scope of Articles 9.1(d) and
(e) of the Agreement on Agriculture and, if so, whether it meets the requirements of Article 9.4 of
that Agreement. If we find that it does not, we will address the complainants' claims regarding the
Marketing and Transportation Scheme , together with the other schemes challenged by the
complainants, under Articles 9.1(a) and (c) of the Agreement on Agriculture.
7.2.4.4.2 Burden of proof
7.179. The parties disagree as to who bears the burden of proof under Article 9.4 of the Agreement
on Agriculture. India considers Article 9.4 to be an "autonomous right", not an exception, and
contends that the complainants had to demonstrate, in their first wri tten submissions, that the
Marketing and Transportation Scheme is inconsistent with Article 9.4, which they failed to do.412 In
this regard, India submits that "[i]f it is [the] complainants' view that the subsidies under Marketing
and Transportation Scheme are not related to costs/items set out in Articles 9.1(d) and (e), they
must demonstrate their claim with evidence." 413 India explains that paragraph 3(1) of the Panel's
Working Procedures requires the complainants to set out their case in chief, including an explanation
why the Marketing and Transportation Scheme does not fall under Article 9.4 of the Agreement on
Agriculture, in their first written submissions. 414 India also submits that "[t]he complainants have
failed to provide any argument/evidence to s ubstantiate their claim that [the] Marketing and
Transportation Scheme does not fall under Article 9.1(d) and 9.1(e)."415
7.180. By contrast, Brazil considers that characterization of Article 9.4 as an "autonomous right" or
an "exception", and any implication of such characterization on the allocation of the initial burden of
proof, is not determinative of the Panel's resolution of this dispute.416 This is because, according to
Brazil, the underlying issue was fully debated by the parties, and the evidence compelli ngly
demonstrates that the Marketing and Transportation Scheme does not fall within the scope of
Articles 9.1(d) and (e). 417 For its part, Australia considers that Article 9.4 is an exception to the
export subsid y obligations in Articles 3.3 and 8 of the Agreement on Agriculture , but does not
consider the characterization of Article 9.4 determinative of which party bears the in itial burden of

410 Part IV, Section II of India's Schedule, which is relevant to export subsidies, is blank, except for a
reference in its Column 8 to relevant Supporting Tables. In turn, India's Supporting Tables state that India "does
not maintain any export subsidy" within the meaning of Article 9 of the Agreement on Agriculture.
(G/AG/AGST/IND, p. 4, para. 7) The only subsidy available to agricultural producers is the exemption from
income tax of profits from export sales, which also applies to the exports of industrial goods. (Ibid.)
412 India's opening statement at the second substantive meeting of the Panel, paras. 81, 105, and 109.
413 India's response to Panel question No. 57.
414 India's opening statement at the second substantive meeting of the Panel, para. 82.
415 India's first written submission, para. 123.
416 Brazil's response to Panel question No. 92, para. 133.
417 Brazil's response to Panel question No. 92, para. 134.
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raising the provision.418 Guatemala also disagrees with India's characterization of Article 9.4 as an
autonomous right and submits that the usual rules on burden of proof apply, whereby a party to a
dispute bears the burden of proving its claim or defence.419 Irrespective of whether Article 9.4 is an
exception or an autonomous right, the complainants submit that they have comprehensively
demonstrated that the Marketing and Transportation Scheme does not satisfy the terms of
Article 9.4, read together with Articles 9.1(d) and (e).420
7.181. In assessing the complainants' claims regarding the Marketing and Transportation Scheme,
and India's contention that this Scheme is permitted under Article 9.4 of the Agreement on
Agriculture, read in conjunction with its Articles 9.1(d) and (e), we do not find it necessary to make
a finding on the legal nature of Article 9.4 of the Agreement on Agriculture. Nor do we consider it
necessary to decide which party bears the burden of proof on the issue of whether the Marketing
and Transportation Scheme falls within Articles 9.1(d) and (e), and therefore is permitted under
Article 9.4. Regardless of the nature of Article 9.4 and who bears the burden of proof, both the
complainants and India have submitted extensive arguments and evidence on the issue of whether
the Marketing and Transportation Scheme falls under Articles 9.1(d) and (e) and whether it is hence
permitted under Article 9.4. 421 As explained in section 7.2.4.4.5 below, having examined these
arguments and evidence, we found the complainants' position to be more persuasive and sufficient
for us to conclude that the Marketing and Transportation Scheme does not fall under Article 9.4.
7.182. We disagree with India's argument that the complainants were required to submit their
evidence and arguments in their first written submissions. Contrary to what India argues,
paragraph 3(1) of the Panel's Working Procedures does not require the complainants to present
exhaustively their arguments in the first written submissions. Rather, it requires " each party [to]
submit a written submission in which it presents the facts of the case and its arguments ".422
Furthermore, India has not shown that it was somehow prejudiced by the complainants' alleged late
submission of evidence and arguments on this issue. Rather, regardless of whether Article 9.4
provides an autonomous right or grants an exception, the partie s have exchanged considerable
evidence and arguments on this issue, and, in our view, India has not demonstrated that the timing
of these exchanges restricted its ability to respond to the complainants' assertions, or otherwise
limited the Panel's ability to objectively examine those arguments and evidence in order to assess
whether the Marketing and Transportation Scheme falls within the scope of Article 9.4.423
7.183. We will therefore examine the totality of arguments and evidence submitted by the
complainants and India to decide whether the Marketing and Transportation Scheme falls under
Article 9.4 of the Agreement on Agriculture.
7.2.4.4.3 Main arguments of the parties and third parties
7.184. As noted, India submits that the Marketing and Transportation Scheme falls within the scope
of Articles 9.1(d) and (e) of the Agreement on Agriculture and is therefore permitted under
Article 9.4 of that Agreement. 424 India argues that the Marketing and Transportation Scheme

418 Australia's response to Panel question No. 92, paras. 143 and 149-153.
419 Guatemala's response to Panel question No. 92.
420 Brazil's response to Panel question No. 92, para. 141; Australia's response to Panel question No. 92,
421 Brazil's second written submission, paras. 107 -149; Australia's second written submission,
paras. 120-169; Guatemala's second written submission, paras. 79 -111; complainants' responses to Panel
questions Nos. 82 and 84; India's first written submission, paras. 116 -123; opening statement at the first
substantive meeting of the Panel, paras. 14-17; closing statement at the first substantive meeting of the Panel,
paras. 40-41; second written submission, paras. 98-106; opening statement at the second substantive meeting
of the Panel, paras. 77-83; and response to Panel question No. 92.
422 Working Procedures of the Panel, para. 3(1). We further note that Australia and Brazil state, in their
first written submissions, that Article 9.4 is not relevant to the present disputes. (Australia's first written
423 We note that, in similar circumstances, panels and the Appellate Body have taken into account the
extent to which the other party was given an opportunity to respond to new evidence adduced by a party. See
e.g. Appellate Body Report, Argentina – Textiles and Apparel, paras. 79-81; and Panel Reports, Korea – Alcoholic
Beverages, paras. 5.24-5.25; China – Autos (US), para. 7.81; EC and certain member States – Large Civil Aircraft
424 India's first written submis sion, para. 116; second written submission, para. 98. India argues that
paragraph 8 of the Nairobi Ministerial Decision on Export Competition extended the application of Article 9.4 for
developing countries until 2023. (India's first written submission, fn. 87 to para. 102)
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"envisages payment to sugar mills at a specified rate towards exp enses incurred for the marketing
including handling, quality up -gradation, debagging, re -bagging and other processing costs of
sugar".425 In India's view, these costs "fall squarely within the meaning of Article 9.1(d) as specific
costs incurred as part of and during the process of selling sugar on the export market". 426 India
further points out that payment towards ocean freight, envisaged under the Marketing and
Transportation Scheme, "falls squarely within the meaning of 'international transport and freigh t'"
under Article 9.1(d). 427 Finally, according to India, payme nts at specified rates towards internal
transport and freight charges, including loading, unloading, and fobbing, envisage d under the
Marketing and Transportation Scheme, "fall[] squarely within the ambit of Article 9.1(e)".428
7.185. The complainants argue that the design and structure of the Marketing and Transportation
Scheme demonstrate that the purpose of the assistance is to pay sugarcane arrears to farmers and
not to offset marketing and transpor tation costs429, and that the amount of assistance provided
under the Marketing and Transportation Scheme is not limited to the costs of marketing and
transportation actually incurred by sugar mills.430
7.186. In particular, Brazil submits that the legal standard u nder Articles 9.1(d) and (e) requires
"both a qualitative and a quantitative relationship between the receipt of the subsidy at issue and
incurrence of the types of costs o r charges listed under Articles 9.1(d) and (e)". 431 In this regard,
Brazil maintains that the structure, design and operation of the Marketing and Transportation
Scheme reveal that it does not fall under Articles 9.1(d) and (e) because neither the qualitative nor
the quantitative aspect is satisfied.432 Australia maintains that, to fall under Article 9.1(d), "a subsidy
must be provided for the distinct purpose of covering 'costs of marketing exports of agricultural
products' including 'the costs of international transport and freight '".433 Likewise, Australia submits
that, to fall under Article 9.1(e), the subsidy must have "the distinct purpose of creating
advantageous conditions for 'internal transport and freight charges on export shipments '".434
Furthermore, assuming that the assistance u nder the Marketing and Transportation Scheme falls
under Articles 9.1(d) and (e), Australia argues that the Marketing and Transportation Scheme does
not ensure that the amount of assistance does not exceed the costs incurred. 435 For its part,
Guatemala argues that, to fall under Article 9.1(d) or (e), a subsidy "must correspond qualitatively
to the types of costs specified therein and must be limited quantitatively to the amount of such
costs".436 According to Guatemala, the design and structure of the Market ing and Transportation

425 India's first written submission, para. 119.
426 India's first written submission , para. 119 (referring to Notification of 12 September 2019,
(Exhibit JE-114), para. 3(i)(a)). (emphasis omitted); second written submission, para. 99.
427 India's first written submission, para. 120 (referring to Notification of 12 September 2019,
428 India's first written submission, para. 12 2 (referring to Notification of 12 September 2019,
429 Brazil's second written submission, paras. 127 -130; Australia's second written submission,
paras. 130-131; Guatemala's second written submission, para. 81.
430 Brazil's second written submission, paras. 134 -143; Australia's second written submission,
paras. 147-169; Guatemala's second written submission, paras. 95-108.
431 According to Brazil, qualitatively, Article 9.1(d) requires a rational relationship between the subsidies
at issue, on the one hand, and the "costs of marketing", on the other hand. Similarly, and again qualitatively,
Article 9.1(e) requires that the subsidies must take the form of "internal transport and freight charges" that are
"more favourable than for domestic shipment". In terms of the required quantitative relationship, Brazil argues
that both provisions require, at a minimum, that the subsidy amou nt not exceed the actual costs under the
relevant cost categories or charges. Finally, Brazil argues that these requirements and the resulting scope of
Articles 9.1(d) and (e) must be interpreted strictly and narrowly in order to ensure that there is no circumvention
of the export subsidy reduction commitments. (Brazil's second written submission, paras. 118 and 119-121)
432 Specifically, Brazil argues that (i) the actual purpose of the Marketing and Transportation Scheme is
the payment of cane price dues of farmers; (ii) this purpose cannot be reconciled with the required relationship
to the relevant costs and charges under Articles 9.1(d) and (e); and (iii) the M arketing and Transportation
Scheme fails to consider, and in fact far exceeds, the actual costs of the relevant cost items. (Brazil's second
written submission, paras. 125, 131, 133, and 143)
433 Australia's second written submission, para. 121. (underlining omitted) See also Australia's response
434 Australia's second written submission, para. 122; response to Panel question No. 56, paras. 43-44.
435 Australia's second written submission, para. 149. Australia explains that, given the clear lack of a
relationship between the Marketing and Transportation Scheme and the kinds of costs identified in Articles 9.1(d)
and (e), it is unnecessary for the Panel to examine whether payments under the Marketing and Transportation
Scheme exceed those actual costs. (Ibid. para. 148)
436 Guatemala's second written submission, para. 80. (emphasis omitted)
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Scheme reveals that the assistance under that Scheme is provided for the purpose of paying
sugarcane arrears owed to farmers, and not for the purpose of offsetting costs reflected in
Articles 9.1(d) and (e). Furthermore, in Guatemala 's view, even if the assistance under the
Marketing and Transportation Scheme was granted for a purpose reflected in Article 9.1(d) or (e),
the amount of assistance exceeds the costs actually incurred b y sugar mills for the marketing or
transportation of sugar exports.437
7.187. As a third party, the European Union does not take a position on whether the Marketing and
Transportation Scheme falls within the scope of Articles 9.1(d) and (e) .438 Nevertheless, the
European Union invites the Panel to carefully examine Australia's allegation that the amounts of
assistance are not linked to the actual costs of marketing and transportation. 439 According to the
European Union, the mere fact that the granting authority describes a subsidy as one that covers
transport or marketing expenses is not sufficient to bring that subsidy within the scope of
Article 9.1 (d) or (e). Instead, in the European Union's view, "it must be shown that there is some
link, either in law or in fact, between the granting of the subsidies and those types of expenses."440
7.2.4.4.4 Legal standard
7.188. Article 9.4 of the Agreement on Agriculture provides:
During the implementation period, developing country Members shall not be required
to undertake commitments in respect of the export subsidies listed in subparagraphs
(d) and (e) of paragraph 1 above, provided that these are not applied in a manner that
would circumvent reduction commitments.
7.189. Articles 9.1(d) and (e) of the Agreement on Agriculture refer to:
(d) the provision of subsidies to reduce the costs of marketing exports of agricultural
products (other than widely available export promotion and advisory services) including
handling, upgrading and other processing costs, and the costs of international transport
and freight;
(e) internal transport and freight charges on export shipments, provided or mandated
by governments, on terms more favourable than for domestic shipments[.]
7.190. Both Articles 9.1(d) and (e) mention specific types of cos ts related to exportation. In
particular, Article 9.1(d) refers to costs of marketing and international transport and freight, whereas
Article 9.1(e) refers to charges on internal transport and freight on export shipments. Therefore, we
are of the view that, for a subsidy programme to fall within the scope of either of these provisions,
it must be related to one of the types of costs addressed in these two provisions.
7.191. The same view was expressed by the Appellate Body in US – FSC. According to the Appellate
Body, Article 9.1(d) does not merely refer to any costs that effectively reduce the cost of marketing.
Rather, it covers "specific types of costs that are incurred as part of and during the process of selling
a product."441 The costs referred to in Article 9.1(d) thus "differ from general business costs, such
as administrative overhead and debt financing costs, which are not specific to the process of putting
a product on the market, and which are, therefore, related to the marketing of exports only in the
broadest sense."442 In our view, the same logic applies to Article 9.1(e): to fall under that provision,
a governmental action must bring about a price advantage for internal transport and freight charges
on export shipments.

437 Guatemala's second written submission, para. 81.
438 European Union's third-party submission, para. 66.
439 European Union's third-party submission, paras. 66-67.
440 European Union's third-party submission, para. 67.
441 Appellate Body Report, US – FSC, para. 130. In that dispute, the United States appealed the panel's
finding that, by reducing an exporter's income tax liability, FSC subsidies effectively reduce d the cost of
marketing agricultural products. The United States argued that although income taxes may be a cost of doing
business, they are not part of the "costs of marketing exports" under Article 9.1(d). The Appellate Body reversed
the panel's finding. (Ibid. paras. 122-132)
442 Appellate Body Report, US – FSC, para. 130.
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7.192. Furthermore, in our view, the requirements of Articles 9.1(d) and (e) involve a limitation on
the amount of assistance provided under a given subsidy programme.443 In this regard, Article 9.1(d)
stipulates that the purpose of the subsidy is "to reduce" (which means "to make smaller,
diminish"444) the costs of marketing as well as international transport and freight. Accordingly, to
fall under Article 9.1(d), the amount of the subsidy should not exceed the actual costs of marketing
and international transport and freight. Otherwise, it cannot be said that the purpose of the subsidy
is to "reduce" such costs, as required under this provision. While Article 9.1(e) does not contain
specific language regarding the amount of the subsidy, it indicate s that the subsidy has to be one
that involves internal transport and freight charges on export shipments, provided on terms more
favourable than for domestic shipments. 445 Logically, therefore, to fall under Article 9.1(e), the
amount of the subsidy should not exceed the amount of internal transport and freight charges for
domestic shipments. The contrary view would defeat the purpose of Article 9.4 of the Agreement on
Agriculture, which sets forth a time -limited exception for developing country Members to provide
export subsidies for specific types of costs subject to the requirement that "these are not applied in
a manner that would circumvent reduction commitments".
7.193. With these considerations in mind, we now assess whether the Marketing and Transportation
Scheme falls within the scope of Articles 9.1(d) and (e) of the Agreement on Agriculture.
7.2.4.4.5 Assessment of the Marketing and Transportation Scheme under Articles 9.1(d)
and 9.1(e) of the Agreement on Agriculture
7.194. The parties disagree whether the assistance provided under the Marketing and
Transportation Scheme relates to one of the types of costs listed in those provisions and whether
the amount of assistance provided under this Scheme exceeds the actual relevant costs incurred by
sugar mills.
7.195. India argues, first, that the assistance under the Marketing and Transportation Scheme falls
under the types of costs identified in Articles 9.1(d) and (e). 446 Second, according to India, "the
amount of assistance provided has been calculated based on extensive stakeholder consultation such
that the lump sum amount arrived at does not exceed the costs typically incurred by a sugar mill
towards such expenses."447 In support of its position, India submits "a few sample communications
sent to various stakeholders seeking relevant information in order to frame the Marketi ng and
Transportation Scheme".448
7.196. The complainants submit that the design , structure and operation of the Marketing and
Transportation Scheme demonstrate that the purpose of the assistance provided is to pay sugarcane
arrears to farmers and not to offset ma rketing and transportation costs .449 According to the
complainants, the amount of assistance provided under the Marketing and Transportation Scheme
is not limited to the costs of marketing and transportation actually incurred by sugar mills.450
7.197. We address, in turn, whether (i) the assistance provided under the Marketing and
Transportation Scheme relates to one of the types of costs listed in Articles 9.1(d) and (e), and (ii)
the amount of assistance provided under th is Scheme exceeds the actual c osts incurred by sugar
mills.

443 The parties agree that the amount of the subsidy should not exceed the actual expenses of marketing
and transportation. (Brazil's second written submission, para. 120; Australia's second written submission, para.
121; Guatemala's second written submission, para. 80; India's response to Panel questions Nos. 35 and 81)
444 Oxford English Dictionary online, definition of "reduce"
https://www.oed.com/view/Entry/160503?rskey=M9oHcY&result=2#eid (accessed 22 July 2021).
445 As the panel in Canada – Dairy observed, "Article 9.1(e) is directed at reduced internal transport and
freight charges on export shipments." (Panel Report, Canada – Dairy, para. 7.95 (emphasis original))
446 India's first written submission, para. 123.
447 India's opening statement at the first substantive meeting of the Panel, para. 17.
448 India's response to Panel question No. 57 (referring to Exhibits IND-15, IND-16, IND-17, and IND-18).
449 Brazil's second written submission, paras. 127 -130; Australia's second written submission,
paras. 130-131; Guatemala's second written submission, para. 81.
450 Brazil's second written submission, paras. 134 -143; Australia's second written submission,
paras. 147-169; Guatemala's second written submission, pars. 95-108.
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7.2.4.4.5.1 Whether the assistance under the Marketing and Transportation Scheme
relates to the types of costs in Articles 9.1(d) and (e)
7.198. Consistent with the legal standard articulated above, we start by examining whether the
assistance provided under the Marketing and Transportation Scheme relates to the types of costs
listed in Article 9.1(d) and (e) of the Agreement on Agriculture.
7.199. As an initial point, we note that, as India argues, the Marketing and Transportation Scheme
contains elements that refer to costs of marketing and transportation.451 First, the full title of the
Marketing and Transportation Scheme is "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 export of sugar". 452 Furthermore, we
recall that, under the Marketing and Transportation Scheme, the Central Government provide s a
"lump sum assistance for expenses on export of sugar limited to MAEQ of sugar mills for the sugar
season 2019 -20, in the following manner ": (i) for "marketing including handling, quality
up-gradation, debagging [and] re-bagging and other processing costs etc.", an amount of INR 4400
per tonne; (ii) for "internal transport and freight charges including loading, unloading, and fobbing
etc.", an amount of INR 3428 per tonne; and (iii) for "ocean freight against shipment from Indian
ports to the ports of destination countries etc.", an amount of INR 2620 per tonne of sugar.453
7.200. The above -mentioned categories of expenses relate to marketing, and internal and
international transportation costs. Thus, certain provisions of the Marketing and Transportation
Scheme specify that assistance under this Scheme is provided for marketing and transport ation
expenses incurred on exports of sugar.
7.201. However, other elements of the Marketing and Transportation Scheme indicate that its actual
purpose is to pay the sugarcane price dues of farmers. In particular, paragraph 1 o f the Marketing
and Transportation Scheme, titled "Purpose of assistance", states that "[t]he funds to be provided
as assistance to facilitate export [are] to be used for payment of cane price dues of farmers for the
sugar season 2019 -20 and cane price arr ears of previous sugar seasons, if any." 454 Likewise, the
preamble to the Marketing and Transportation Scheme states that the assistance is provided "with
a view to facilitat[ing] export of sugar during the sugar season 2019 -20 … thereby improving the
liquidity position of sugar mills enabling them to clear cane price dues of farmers for sugar season
2019-20".455 Paragraph 5 of the Marketing and Transportation Scheme also states that "[t]he
assistance is to be used for payment of cane price dues of farmers fo r the sugar season 2019 -20
and cane price arrears of previous sugar seasons, if any."456
7.202. Furthermore, in order to ensure that the assistance under the Marketing and Transportation
Scheme is directly credited to the accounts of sugarcane farmers, sugar mills must open separate
no-lien accounts and furnish to the bank the details and extent of the sugarcane price dues for the
2019-20 and previous sugar seasons. The bank credits the amounts of assistance directly into the
accounts of sugarcane farmers "on behal f of mills against cane dues payable and subsequent
balance, if any, shall be credited into [the] mill's account".457 Within three months from the date of
the subsidy payment, the sugar mill must submit to the DFPD a utilization certificate certifying that
the subsidy was used for the payment of farmers' sugarcane price dues.458 If a sugar mill were to
fail to submit the utilization certificate, the unduly received amount of assistance would be recovered
and the mill would be prevented from benefiting from fu ture schemes announced by the Central
Government.459
7.203. Notably, there is no requirement that sugar mills certify in the utilization certificate that the
assistance was used to reduce the costs of marketing or transportation. Rather, sugar mills must
certify that the assistance was used for paying sugarcane price dues of farmers. Thus, based on the

451 By referring to "marketing and transportation", we refer to both costs of international transport and
freight and internal transport and freight charges.
452 Notification of 12 September 2019, (Exhibit JE-114). (underlining added)
453 Notification of 12 September 2019, (Exhibit JE-114), para. 3(i).
454 Notification of 12 September 2019, (Exhibit JE-114), para. 1.
455 Notification of 12 September 2019, (Exhibit JE-114), preamble.
456 Notification of 12 September 2019, (Exhibit JE-114), para. 5(i).
457 Notification of 12 September 2019, (Exhibit JE-114), para. 5(ii).
458 Notification of 12 September 2019, (Exhibit JE-114), para. 6.
459 Notification of 12 September 2019, (Exhibit JE-114), para. 6.
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text of the Marketing and Transportation Scheme, the principal purpose for which the assistance
must be used seems to be the payment of sugar cane price dues of farme rs. Using it for other
purposes would be inconsistent with the relevant regulatory prescriptions and would result in the
Central Government recovering the payment from the sugar mill and prohibiting it from applying for
future assistance schemes. Although the Scheme indicates that any money left after payment of
sugarcane price arrears will be paid to the mill, there seems to be no requirement that such amounts
be used towards marketing or transportation costs.
7.204. India argues that, by "improv[ing] the liquidity of the sugar mills", the assistance under the
Marketing and Transportation Scheme "ultimately reduc[es] the … transport and marketing costs
incurred".460 We are not convinced by this argument. Even if the assistance under the Marketing and
Transportation Scheme may ultimately contribute to the reduction of marketing and transportation
costs, the purpose of the assistance, as stated in various provisions of the Marketing and
Transportation Scheme, is the payment of sugarcane price arrears.461
7.205. In light of the above, we conclude that the assistance provided under the Marketing and
Transportation Scheme does not relate to the types of costs listed in Articles 9. 1(d) and (e) of the
Agreement on Agriculture.462
7.2.4.4.5.2 Whether the amount of assistance provided under the Marketing and
Transportation Scheme exceeds the actual marketing and transportation costs
7.206. Our conclusion above that the assistance under the Marketing and Transportation Scheme
does not relate to the types of costs listed in Articles 9.1(d) and (e), in principle, suffices to find that
the Marketing and Transportation Scheme does not fall within the scope of those provisions.
However, for the sake of completen ess, we also examine the parties' arguments regarding the
amount of assistance provided under this Scheme.
7.207. India submits that the amount of assistance provided under the Marketing and
Transportation Scheme was determined based on extensive consultations w ith relevant
stakeholders, and does not exceed the costs typically incurred by a sugar mill on marketing and
transportation.463 By contrast, the complainants argue that the application of a single and
unchanging rate of assistance for all exports indicates that the Marketing and Transportation Scheme
is not linked to the actual marketing and transportation costs.464
7.208. As noted above, we consider that, under Article 9.1(d) of the Agreement on Agriculture, the
amount of the subsidy should not exceed the actual costs of marketing and international
transportation, and under Article 9.1(e) the amount of the subsidy should not exceed the internal
transport and freight charges for domestic shipments. The parties also agree with this view.465
7.209. We note that, pur suant to paragraph 3 of the Marketing and Transportation Scheme,
assistance is provided in the form of a lump sum according to a set rate per tonne of sugar exported.
Accordingly, the amount of assistance is determined based on the volume of sugar exports, and not
the actual costs of marketing and transportation borne by the sugar mills . Furthermore, the
assistance is provided in the form of a lump sum and there is no mechanism in place to ensure that
the amount of assistance does not exceed the costs of transportation incurred by a sugar mill.

460 India's opening statement at the first substantive meeting with the Panel, para. 15.
461 As noted, Article 9.1(d) does not merely refer to any costs that effectively reduce the cost of
marketing. Rather, it covers specific types of costs that are incurred as part of and during the process of selling
a product. Such costs differ from general business costs, which are not specific to the process of putting a
product on the market. Likewise, to fall under Article 9.1(e), a governmental action must bring about a price
advantage for internal transport and freight charges on export shipments. (See para. 7.191 above)
462 Our conclusion finds support in the Appellate Body's findings in US – FSC that Article 9.1(d) does not
merely refer to " any 'cost of doing business' that 'effectively reduce[s] the cost of marketing' products ".
(Appellate Body Report, US – FSC, para. 130 (emphasis original))
463 India's closing statement at the first substantive meeting of the Panel, para. 42; response to Panel
question No. 57 (referring to Exhibits IND-15, IND-16, IND-17, and IND-18).
464 Brazil's second written submission, paras. 134 -143; Australia's second written submission, paras.
147-169; Guatemala's second written submission, paras. 95-108.
465 Brazil's second written submission, para. 120; Australia's second written submission, para. 121;
Guatemala's second written submission, para. 80; India's response to Panel question No. 35.
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7.210. The complainants' evidence demonstrates that sugar mills are located in different parts of
India and export sugar on different delivery terms, hence incur ring different amounts of
transportation costs. In particular, the complainants have submitted evidence demonstrating that
sugar mills export sugar on: (i) an ex Works (EXW) 466 basis, which means that the seller incurs
neither internal nor international transportation costs467; (ii) a Free on Board (FOB)468 basis, which
means that the seller does not pay the cost of international shipping from the port of departure to
the final destination469; or (iii) a Cost Insurance & Freight (CIF)470 basis, which means that the seller
covers the costs and freight necessary to deliver the goods to the port named by the buyer. 471 The
use of such different terms in their sales contracts indicates that not all mills will incur transportation
costs in all sales and that transportation costs incurred by mills will differ. Logically, therefore, lump
sum payments, the amount of which is based on the quantity of tonnes of sugar exported by each
mill, are not related to the actual transportation costs incurred by the mills.
7.211. Furthermore, the complainants have submitted evidence demonstrating that, at least for
some sugar mills, the amount of the lump sum provided under the Marketing and Transportation
Scheme exceeds the actual costs of transportation.472 This evidence further supports our view that
the Marketing and Transportation Scheme does not ensure that the amount of assistance does not
exceed the actual costs of transportation.
7.212. India submits that "the amount of assistance provided has been calculated based on
extensive stakeholder consultation such that the lump sum amount arrived at does not exceed the
costs typically incurred by a sugar mill towards such expenses."473 In support of its assertion, India
provided communications from the DFPD requesting information from several entities (Mi nistry of
Railways, Food Corporation of India, Metals and Minerals Trading Corporation of India Limited
(MMTC), and State Trading Corporation of India Ltd (STC)) regarding estimated costs of marketing
and transportation in the context of sugar exports in order to determine the amount of a subsidy.474
7.213. However, India did not provide any further evidence that would demonstrate what kind of
replies the DFPD received and how those replies were taken into account in determining the rates
of assistance under the Marketing and Transportation Scheme. In response to a question from the

466 This rule of INCOTERMS places minimum responsibility on the seller, who merely has to make the
goods available, suitably packaged, at the specified place, usually the seller's factory or depot. The buyer is
responsible for: loading the goods onto a vehicle; all export procedures; onward transport; and all costs arising
after collection of the goods. (See International Chamber of Commerce (ICC), Incoterms Rules, (Exhibit JE-159))
467 Tender Notice for Export of Sugar (Jawahar S.S.S.K. Ltd), (Exhibit JE-160), para. 4; Tender Notice
for Sale of Raw Sugar or White Sugar for Export (Shree Datta S.S.S.K. Ltd), (Exhibit JE-161); and HPCL
Biofuels Ltd Sugar Export Contracts Specifications, (Exhibit JE-162), Annexure 1, paras. 1.6, 3.12 and 5.2.
468 Under the FOB rule, the seller delivers the goods when they are cleared for export and loaded on board
the vessel at the named port. Once the goods have been loaded on board, risk transfers to the buyer, who bears
all costs thereafter. (See International Chamber of Commerce (ICC), Incoterms Rules, (Exhibit JE-159))
469 Reuters, "Indian sugar mills clinch export deals as prices jump – industry", 7 January 2021,
(Exhibit JE-163); and Reuters, "Indian sugar exports poised to hit record 5 million tonnes this year", 17
December 2019, (Exhibit JE-164).
470 Under the CIF rule, the s eller arranges and pays for transport to named port. The seller delivers the
goods when they are cleared for export and loaded on board the vessel. The seller also arranges and pays for
insurance for the goods for carriage to the named port. (See International Chamber of Commerce (ICC),
Incoterms Rules, (Exhibit JE-159))
471 Brazil's second written submission, para. 138; Australia's second written submission,
paras. 165-168; Guatemala's second written submission, paras. 101 and 104. See also Avadh Sugar & Energy
Limited Annual Report 2019-20, (Exhibit JE-158); Balrampur Chini Mills Limited Annual Report 2019-20,
(Exhibit JE-157); Dhampur Sugar Mills Limited Annual Report 2019-20, (Exhibit JE-149).
472 In particular, the Consultancy Report by Green Pool Commodity Specialists, submitted by the
complainants, demonstrates that the average freight rail cost from eleven mills in Maharashtra, which is the
second largest exporting State in India, to the two Maharashtran ports (Jawaharlal Nehru Port (JNPT) and Jaigad)
is INR 489 and INR 817 per tonne, respectively. The fobbing costs of the Maharashtran mills, such as storage
and handling, are between INR 800 and INR 1000 per tonne. ( Consultancy Report, February 2021,
(Exhibit JE-165), Table 4 and p. 5, note 4) Thus, with the higher fobbing cost of INR 1000 factored in, the average
cost of internal transportation and fobbing would be INR 1489 and INR 1817 per tonne, which is lower than the
lump sum of INR 3428 per tonne under paragraph 3(i)(b) of the Marketing and Transportation Scheme. (See
Brazil's second written submission, para. 140; Australia's second written submission, paras. 158-161;
Guatemala's second written submission, para. 104)
473 India's opening statement at the first substantive meeting of the Panel, para. 17.
474 DFPD's Letter to Food Corporation of India of 25 June 2019, (Exhibit IND-15); DFPD's Letter to Ministry
of Railways of 26 June 2019, (Exhibit IND-16); DFPD's Office Memorandum to MMTC of 11 Jul y 2019,
(Exhibit IND-17), and DFPD's Office Memorandum to STC of 11 July 2019, (Exhibit IND-18).
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Panel, India stated that it was unable to share the responses from the relevant stakeholders, or how
they were reflected in determining the rate of assistance due to the business confid ential nature of
such information.475 In this regard, we note that the DSU contains rules regarding confidentiality of
information submitted by the parties. 476 Furthermore, if India considered the general level of
protection provided by the DSU insufficient, it could have requested the Panel to adopt additional
procedures for the treatment and handling of business confidential information pursuant to
paragraph 2(3) of the Working Procedures.
7.214. The only response that India has submitted is an office memorandum from the Ministry of
Railways, which identifies "per ton[n]e freight rate for foodgrains at different distances". 477 This
piece of evidence provides information regarding the base transportation rate per tonne of foodgrains
for the distances of 500, 1,000, 1500, 2,000, and 2,500 kilometres.478 However, we do not see how
this information supports India's assertion that the amount of assistance under the Marketing and
Transportation Scheme does not exceed the actual marketing and transportation expenses. As
noted, since this Scheme involves lump sum payments based on the volume of sugar exported , it
does not take into account the differences in transportation expenses among sugar mills and thus
does not ensure that the amount of assistance does not exceed the actual costs of transportation.
7.215. In light of the above, we conclude that the Marketing and Transportation Scheme does not
ensure that the amount of assistance provided does not exceed the actual costs of marketing and
international transportation in terms of Article 9.1(d), and the actual costs of internal transport and
freight charges for domestic shipments in terms of Article 9.1(e).
7.2.4.4.6 Conclusion
7.216. We have concluded that the assistance provided under the Marketing and Transportation
Scheme does not relate to the types of costs listed in Articles 9.1(d) and (e) of the Agreement on
Agriculture. We have also concluded that the Marketing and Transportation Scheme does not ensure
that the amount of assistance does not exceed the actual costs of marketing and inter national
transportation in terms of Article 9.1(d), and the actual costs of internal transport and freight charges
for domestic shipments in terms of Article 9.1(e). We therefore reject India's argument that the
Marketing and Transportation Scheme falls un der Articles 9.1(d) and (e), and , as a result, under
Article 9.4 of the Agreement on Agriculture.
7.2.4.5 Whether India's assistance schemes are subsidies contingent on export
performance under Article 9.1(a) of the Agreement on Agriculture
7.2.4.5.1 Introduction
7.217. As noted, the complainants argue that India's Production Assistance, Buffer Stock, Marketing
and Transportation, and DFIA Schemes constitute export subsidies within the meaning of
Article 9.1(a) of the Agreement on Agriculture because they grant assistance on the condition that
sugar mills export a certain quantity of sugar each year.479 The complainants assert that, consistent
with the requirements of Article 9.1(a), the aforementioned Schemes are (i) direct subsidies,
including payments in kind; (ii) provided by a government or its agency; (iii) provided "to a firm, to

475 India's response to Panel question No. 82(c).
476 Article 18.2 of the DSU specifically provides that "[w]ritten submissions to the panel or the Appellate
Body shall be treated as confidential, but shall be made available to the parties to the dispute." Parties to a
dispute are free to disclose statements of their own positions to the public, but "shall treat as confidential
information submitted by another Member to the panel or the Appellate Body which that Member has designated
as confidential". Article 13.1 of the DSU further provides that "[a] panel shall have the right to seek information
and technical advice from any individual or body which it deems appro priate". WTO Members "should respond
promptly and fully to any request by a panel for such information as the panel considers necessary and
appropriate". Confidential information that is provided to a panel under Article 13.1 "shall not be revealed without
formal authorization from the individual, body, or authorities of the Member providing the information".
477 Office Memorandum from Ministry of Railways to DFPD of 28 June 2019, (Exhibit IND-23).
478 We note that the parties disagree as to whether the term " foodgrains" covers sugar. (Guatemala's
closing statement at the second substantive meeting of the Panel, para. 3.6; India's response to Panel
question No. 82(b)) We do not find it necessary to address this issue since, in any event, we do not consider
that Exhibit IND-23 supports India's position.
479 The DFIA Scheme is challenged only by Australia.
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an industry, to producers of an agricultural product, to a cooperative or other association of such
producers, or to a marketing board"; and (iv) contingent on export performance.480
7.218. In response, India argues that the complainants have failed to demonstrate the existence of
a financial contribution and benefit with respect to the Production Assistance, Buffer Stock, and
Marketing and Transportation Schemes .481 In this regard, India considers that Article 1.1(a)(1) of
the SCM Agreement constitutes relevant context for construing the meaning of the term "export
subsidies" in Article 9.1 of the Agreement on Agriculture. 482 India explains that "the complainants
have not met their burden to demonstrate [the] 'making' of [a] financial contribution such that they
can show that there is a financial contribution".483 In India's view, "[t]he use of the operative term
'is' in Article 1.1(a)(1) [of the SCM Agreement] indicates that a subsidy can be said to 'exist' only
where the government has actually made a 'financial contribution ' under the challenged
measures."484 Thus, according to India, a demonstration of an actual transfer of funds is required to
establish the existence of a subsidy. 485 Moreover, India submits that the complainants failed to
identify any benchmark in a relevant market to demonstrate the existence of a bene fit and have
merely presumed that a benefit exists.486
7.219. In addition, with respect to the DFIA Scheme challenged by Australia, India argues that it
falls under the scope of footnote 1 to the SCM Agreement, read together with item (i) of Annex I to
the SCM Ag reement, and therefore does not constitute a subsidy within the meaning of the
Agreement on Agriculture.487
7.220. In addressing the complainants' claims, we will first set out the legal standard under
Article 9.1(a) of the Agreement on Agriculture. We will then examine the consistency with that
provision of each of the four assistance programmes challenged by the complainants.
7.2.4.5.2 Legal standard
7.221. Article 9.1(a) reads:
1. The following export subsidies are subject t o reduction commitments under this
Agreement:
(a) the provision by governments or their agencies of direct subsidies, including
payments-in-kind, to a firm, to an industry, to producers of an agricultural product, to
a cooperative or other association of s uch producers, or to a marketing board,
contingent on export performance[.]
7.222. Based on the text of the provision, to fall under Article 9.1(a), assistance must (i) be
provided by a government or its agency; (ii) to a firm, to an industry, to producers of an agricultural
product, to a cooperative or other association of such producers, or to a marketing board; (iii) be a
direct subsidy, including payments in kind; and (iv) be contingent on export performance. We
examine each of these elements in turn.
7.223. First, Article 9.1(a) requires the grantor of the subsidy to be a government or its agency.
The term "government" is defined, inter alia, as "[t]he governing power in a country or state; the
body of people charged with the duty of governing", or "[t]he continuous exercise of authority over
a person, group, etc.; guardianship, protection; control ".488 In turn, a government agency is "an
entity which exercises powers vested in it by a 'government' for the purpose of performing functions
of a 'governmental' character, that is, to 'regulate', 'restrain', 'supervise' or 'control' the conduct of

480 Brazil's first written submission, paras. 200-229; Australia's first written submission, paras. 288-365;
Guatemala's first written submission, paras. 208-241.
481 India's first written submission, para. 110.
482 India's first written submission, para. 105.
483 India's first written submission, para. 107. (emphasis and underlining original)
484 India's first written submission, para. 107. (emphasis original)
485 India's second written submission, paras. 67-89.
487 India's first written submission, paras. 124 and 97.
488 Oxford English Dictionary online, definition of "government"
https://www.oed.com/view/Entry/80321?redirectedFrom=government#eid (accessed 22 July 2021).
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private citizens".489 A granting entity therefore has to be vested with such power and perform such
functions in order for the assistance it provides to fall under Article 9.1(a).
7.224. Second, the recipient of a subsidy must be a firm, an industry, producers of an agricultural
product, a cooperative or other association of such producers, or a marketing board. The Agreement
on Agriculture does not contain separate definitions for these c ategories of recipients. Based on its
ordinary meaning, we consider that the term "producers of an agricultural product" refers to entities
that "make" or "grow" 490 agricultural products within the meaning of the Agreement on
Agriculture.491
7.225. Third, under Article 9.1(a), the assistance must be in the form of a direct subsidy. 492 The
term "direct" is defined, inter alia, as "straightforward, uninterrupted, immediate".493 In our view,
in the context of Article 9.1(a), this term indicates that the subsidy must be provided from the
grantor to the recipient in a straightforward and immediate manner. With respect to the term
"subsidy", we note that it is not defined in the Agreement on Agriculture. However, the definition of
a "subsidy" in Article 1.1 of the S CM Agreement constitutes relevant context for interpreting the
term "subsidies" in Article 9.1(a) of the Agreement on Agriculture. 494 Pursuant to Article 1.1 of the
SCM Agreement, a "subsidy" shall be deemed to exist if there is a "financial contribution by a
government or any public body" and "a benefit is thereby conferred".495 Below, we elaborate on the
elements of Article 1.1 of the SCM Agreement that are relevant to these disputes.
7.226. Article 1.1(a)(1) of the SCM Agreement lists government practices that constitute a financial
contribution for the purposes of that Agreement, which include a "direct transfer of funds", "potential
direct transfers of funds", and "government revenue that is otherwise due [that] is forgone or not
collected".496 Direct transfers of funds can take the form of a grant.497 Grants consist of transactions
in which money or money's worth is given to a recipient, normally without an obligation or
expectation that anything will be provided to the grantor in return.498
7.227. Under Article 1.1(b) of the SCM Agreement, a financial contribution by a government is a
subsidy if "a benefit is thereby conferred". A benefit within the meaning of Article 1.1(b) is an
"advantage"499 to the recipient of the financial contribution. The term "be nefit", as used in
Article 1.1(b), "implies some kind of comparison" to determine whether "the 'financial contribution'
makes the recipient 'better off' than it would otherwise have been, absent that contribution".500 The

489 Appellate Body Report, Canada – Dairy, para. 97.
490 The term "producer" is defined as "[a] person, company, or country that makes, grows, or supplies
goods or commodities for sale ". Oxford English Dictionary online, definition of "producer"
https://www.oed.com/view/Entry/151981?redirectedFrom=producer#eid (accessed 22 July 2021).
491 Article 2 of the Agreement on Agriculture provides: " This Agreement applies to the products listed in
Annex 1 to this Agreement, hereinafter referred to as agricultural products." In turn, Annex 1 defines the product
coverage of the Agreement on Agriculture.
492 Payments-in-kind is one of the forms in which "direct subsidies" may be granted. The word "payments"
denotes a transfer of economic resources from the grantor to the recipient. (Appellate Body Report ,
Canada - Dairy, para. 87)
493 Oxford English Dictionary online, definition of "direct"
https://www.oed.com/view/Entry/53293?rskey=R6QbSx&result=2#eid (accessed 22 July 2021).
494 Previous panels and the Appellate Body have also considered the definition of the term "subsidy" in
Article 1.1 of the SCM Agreement to be relevant context for interpreting the term "subsidy" in the Agreement on
Agriculture. (Panel Report, US – FSC, para. 7.150; Appellate Body Report, Canada – Dairy, para. 87)
495 Appellate Body Report, US – Carbon Steel (India), para. 4.8. In lin e with this definition, a "subsidy"
within the meaning of Article 9.1(a) "involves a transfer of economic resources from the grantor to the recipient
for less than full consideration". (Appellate Body Report, Canada – Dairy, para. 87)
496 Articles 1.1(a)(1)(i) and (ii) of the SCM Agreement.
497 Article 1.1(a)(1)(i) lists in brackets examples of direct transfers of funds ("e.g. grants, loans, and
equity infusion").
498 Appellate Body Report, US – Large Civil Aircraft (2nd complaint), para. 616; Panel Report, India - Export
Related Measures, para. 7.436. Since grants do not involve a reciprocal obligation on the part of the recipient,
they would typically not be provided by a private entity acting pursuant to commercial considerations. (Appellate
Body Report, US – Large Civil Aircraft (2nd complaint), para. 617; Panel Reports, India – Export Related Measures,
499 Appellate Body Reports, Canada – Aircraft, paras. 154-156; Canada – Renewable
Energy / Canada - Feed-in Tariff Program, para. 5.150; and Panel Report, US – Tax Incentives, para. 7.159.
500 Appellate Body Report, Canada – Aircraft, para. 157. See also Appellate Body Report, EC and certain
member States – Large Civ il Aircraft (Article 21.5 - US), para. 5.1 07; Panel Report, US – Tax Incentives ,
para. 7.159.
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marketplace provides an appropriate basis for comparison in determining whether a "benefit" has
been "conferred", because the trade-distorting potential of a "financial contribution" can be identified
by determining whether the recipient has received a "financial contribution" on terms more
favourable than those available to the recipient in the market. 501 Article 14 of the SCM Agreement,
which addresses the "Calculation of the Amount of a Subsidy in Terms of the Benefit to the Recipient"
by an investigating authority, provides context for th e interpretation of the term "benefit" in
Article 1.1(b).502
7.228. Finally, with respect to the term " contingent on export performance ", we note that
Article 9.1(a) of the Agreement on Agriculture and Article 3.1(a) of the SCM Agreement contain
virtually identical wording denoting export contingency. 503 We therefore see no reason to read the
requirement of export contingency under Article 9.1(a) of the Agreement on Agriculture differently
from that under Article 3.1(a) of the SCM Agreement. 504 We note that the ordinary meaning of the
term "contingent" is "dependent for its occurrence or character on or upon some prior occurrence or
condition".505 Article 3.1(a) of the SCM Agreement therefore prohibits subsidies that are conditional
upon export performance, or are dep endent for their existence on export performance. 506 To
demonstrate such a relationship of conditionality or dependence, it has to be shown that the granting
of the subsidy is "tied to" the export performance.507
7.229. With these considerations in mind, we now ass ess whether India's assistance schemes are
inconsistent with Article 9.1(a) of the Agreement on Agriculture.
7.2.4.5.3 Production Assistance Scheme, Buffer Stock Scheme, and Marketing and
Transportation Scheme
7.230. The Production Assistance Scheme, the Buffer Stock Sch eme, and the Marketing and
Transportation Scheme share certain common features, such as the grantor and the recipient of the
assistance, the mechanism of payment of the assistance, and the operation in conjunction with the
MIEQs or the MAEQ. We therefore e xamine the consistency of these three Schemes with
Article 9.1(a) jointly. In doing so, we follow the legal test articulated in paragraph 7.222 above.
7.2.4.5.3.1 Whether the assistance is provided by a government or its agency
7.231. The complainants argue that the assistance under the Production Assistance Scheme, the
Buffer Stock Scheme, and the Mark eting and Transportation Scheme is provided " by governments
or their agencies" within the meaning of Article 9.1(a) of the Agreement on Agriculture. In particular,
the complainants explain that the assistance under the three Schemes is provided and administered
by the DFPD, which is a government agency that is part of the Ministry of Consumer Affairs, Food
and Public Distribution.508 Furthermore, Guatemala points out that the introductory paragraphs of
the various instruments implementing the measures at issue indicate that they are being notified by
the "Central Government".509

501 Appellate Body Report, Canada – Aircraft, para. 157. See also Appellate Body Report, EC and certain
member States – Large Civil Aircraft (Article 21.5 - US), pa ra. 5.1 07; Panel Report, US – Tax Incentives ,
para. 7.159.
502 Appellate Body Reports, Canada – Aircraft, para. 155 and 158; Canada – Renewable Energy / Canada
– Feed-in Tariff Program, para. 5.163. Article 14 confirms, in particular, that the focus of the analysis is on the
recipient, and that benefit is assessed by reference to the conditions that would exist in the market in the absence
of the financial contribution. (Appellate Body Report, Canada – Aircraft, paras. 155 and 158)
503 Article 9.1(a) of the Agreement on Agriculture refers to subsidies "contingent on export performance",
while Article 3.1(a) of the SCM Agreement refers to subsidies "contingent upon … export performance". In our
view, the difference in the prepositions does not lead to a difference in the legal tests under the two provisions.
504 The Appellate Body in US – Upland Cotton and US – FSC relied on Article 3.1(a) of the SCM Agreement
in interpreting Articles 9.1(a) and 9.1(e) of the Agreement on Agriculture. (Appellate Body Reports, US – Upland
505 Oxford English Dictionary online, definition of "contingent"
https://www.oed.com/view/Entry/40248?redirectedFrom=contingent#eid (accessed 22 July 2021).
506 Appellate Body Report, Canada – Aircraft, para. 166.
507 Appellate Body Report, US – FSC (Article 21.5 – EC), para. 111.
508 Australia's first written submission, pa ras. 290, 306, and 344; Guatemala's first written submission,
para. 287. See also Brazil's first written submission, paras. 201, 206, and 211.
509 Guatemala's first written submission, para. 287.
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7.232. India does not submit any arguments in response to the complainants' assertions.
7.233. We note that preambles to the legal instruments implementing the Production Assistance,
the Buffer Stock, and the Marketing and Transportation Schemes state that the Schemes are notified
by the Central Government. 510 The assistance under the Schemes is administered, or
operationalised511, by the DFPD. In particular, sugar mills are required to submit claims to the DFPD
to receive the subsidy.512 The DFPD is part of India's Ministry of Consumer Affairs, Food and Public
Distribution, which, in turn, is part of the Central Government.513 We therefore understand that the
assistance under the Production Assistance, the Buffer Stock, and the Marketing and Transportation
Schemes is provided by the Central Government through a specialized agency, the DFPD.
7.234. We therefore conclude that the assistance under the Production Assistance, the Buffer Stock,
and the Marketing and Transportation Schemes is provided " by governments or their agencies "
within the meaning of Article 9.1(a) of the Agreement on Agriculture.
7.2.4.5.3.2 Whether assistance is provided "to a firm, to an industry, to producers of an
agricultural product, to a cooperative or other association of such producers, or to a
marketing board"
7.235. The complainants argue that, under the Production Assistance, Buffer Stock, and Marketing
and Transportation Schemes, assistance is provided to entities that qualify as recipients recognized
under Article 9.1(a).514 Brazil and Australia assert that assistance is paid to sugar mills, which qualify
as "producers of an agricultural product", or, alternatively, as "an industry", "a cooperative or other
association of such producers", or "firms".515 Guatemala submits that assistance is provided to sugar
mills, which are "producers of an agricultural product". 516 Guatemala also argues that sugar mills
could be considered "an industry".517
7.236. India does not submit any arguments in response to the complainants' allegations in this
respect.518
7.237. To begin with, we agree with the complainants that the recipient s of the assistance under
the three Schemes are sugar mills. 519 Even though the assistance is credited directly to the bank
accounts of sugarcane farmers, the recipients of the subsidy for the purpose of analysis under
Article 9.1(a) are sugar mills. This is because the legal instrumen ts that implement these schemes
provide that: (i) sugar mills are eligible for assistance 520; (ii) it is sugar mills that must satisfy the
eligibility criteria for assistance 521; (iii) the assistance is paid on a mill -specific basis522; and (iv)
sugar mills must present utilization certificates to the DFPD to demonstrate that the assistance was

510 Notification of 5 October 2018, (Exhibit JE-74), preamble; Notification of 31 July 2019, (Exhibit JE-77),
preamble; Notification of 12 September 2019, (Exhibit JE-114), preamble.
511 See Notification of 5 October 2018, (Exhibit JE-74), paras. 5 -6; Notification of 31 July 2019,
(Exhibit JE-77), paras. 7-8; Notification of 12 September 2019, (Exhibit JE-114), paras. 6-11.
512 Notification of 5 October 2018, (Exhibit JE-74), para. 3(vi); Notification of 31 July 2019,
513 DFPD Functions, (Exhibit AUS-45).
514 Australia's first written submission, para. 295; Guatemala's first written submission, para. 288.
515 Australia's first written submission, para. 296; response to Panel question No. 54; Brazil's first written
submission, para. 201 and fn 252 thereto and fn 214 to para. 168; response to Panel question No. 54.
516 Guatemala's first written submission, para. 288; response to Panel question No. 54.
517 Guatemala's response to Panel question No. 54.
518 In response to a question from the Panel, India simply stated that, t o establish the existence of a
subsidy under Article 9.1 (a), each of the requirements of that provision must be met. (India's response to Panel
question No. 54)
519 See complainants' response to Panel question No. 9.
520 E.g. Notification of 9 May 2018, (Exhibit JE-75), implements "the Scheme for Assistance to Sugar Mills"
in the 2017-18 sugar season; Notification of 31 July 2019, ( Exhibit JE-77), stipulates that "[t]he funds [are] to
be provided to sugar mills" ; Notification of 12 September 2019, ( Exhibit JE-114), implements "the Scheme for
providing assistance to sugar mills for expenses on marketing [and transportation] costs". (underlining added)
521 See e.g. Notification of 9 May 2018, (Exhibit JE-75), para. 2; Notification of 31 July 2019,
522 See e.g. Notification of 9 May 2018, (Exhibit JE-75), paras. 3 and 4; Notification of 31 July 2019,
(Exhibit JE-77), para. 4; Notification of 12 September 2019, (Exhibit JE-114), paras. 2 and 6.
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used in accordance with its purpose (i.e. to pay arrears owed to sugarcane farmers).523 Furthermore,
if a sugar mill does not have any sugarcane arrears, the assistance is credited to the mill's account.524
In our view, the fact that, in the case of sugar mills that owe sugarcane dues, the assistance is
credited directly into farmers' accounts does not make them the recipients of assistance. Rather, it
simply reflects the purpose for which the assistance is provided to sugar mills, i.e. to alleviate the
mills from financial obligation towards the farmers.
7.238. We recall that, under Article 9.1(a), a subsidy must be provided to one of the following
categories of recipients: a firm, an industry, producers of an agricultural product, a cooperative or
other association of such producers, or to a marketing board. We further recall our understanding
that "producers of an agricultural product" are entities that "make" or "grow" agricultural products
within the meaning of the Agreement on Agriculture.
7.239. As explained above, pursuant to the terms of the Production Assistance, the Buffer Stock,
and the Marketing and Transportation Schemes, the recipients of assistance are sugar mills.525 Sugar
mills produce sugar from sugarcane. Sugar falls under Chapter 17 of the Harmonized System (HS),
titled "Sugars and sugar confectionery"526, and is therefore an agricultural product that falls within
the scope of Annex 1 of the Agreement on Agriculture.527
7.240. We therefore conclude that, under the Production Assistance, the Buffer Stock, and the
Marketing and Transportation Schemes, as sistance is provided to "producers of an agricultural
product" within the meaning of Article 9.1(a) of the Agreement on Agriculture.528
7.2.4.5.3.3 Whether the assistance is a "direct subsid[y]"
7.241. The complainants submit that the assistance under the Production Assistan ce Scheme, the
Buffer Stock Scheme, and the Marketing and Transportation Scheme constitutes a "direct subsid[y],
including payments in kind" within the meaning of Article 9.1(a) of the Agreement on Agriculture.
In particular, Brazil argues that, under the three Schemes, there is a transfer of financial resources
in the form of money from the Central Government to sugar mills, which is made without full
consideration and therefore constitutes a "direct subsid [y]" within the meaning of Article 9.1(a) of
the A greement on Agriculture. 529 Australia contends that the assistance is paid by the Central
Government, on behalf of eligible sugar mills, into sugarcane farmers' bank accounts , and any
remaining funds are credited directly to the mill accounts.530 For its part, Guatemala submits that,
under the three Schemes, "the monies provided by India to sugar mills constitute a transfer of
economic resources from the Indian Government (the grantor) to sugar mills (the recipient)." 531 In
the complainants' view, the assistan ce under the three Schemes is in the form of a grant, which
confers a benefit on sugar mills, making them better off than they would have been in the absence
of the assistance.532 In response to India's argument that an actual disbursement of funds is required
to demonstrate the existence of a subsidy, the complainants argue that the commitment to disburse

523 See e.g. Notification of 9 May 2018, (Exhibit JE-75), para. 4; Notification of 31 July 2019,
524 Notification of 2 December 2015, (Exhibit JE-76), para. 2(vi); Notification of 9 May 2018,
(Exhibit JE-75), para. 3(iv); Notificati on of 5 October 2018, (Exhibit JE-74), para. 3(iv); Notification of
31 July 2019, (Exhibit JE-77), para. 9(a); Notification of 15 June 2018, (Exhibit JE-78), para. 9(a); Notification
of 12 September 2019, (Exhibit JE-114), para. 5(ii).
525 See para. 7.237 above.
526 World Customs Organization, HS Nomenclature 2017 edition, (Exhibit JE-118), Chapter 17.
527 Annex 1 of the Agreement on Agriculture, titled "Product Coverage", refers, inter alia, to Chapters 1-24
of the HS. (See para. 7.224 and fn 491 thereto, above)
528 The complainants argue that sugar mills can also be described as "an industry", or, depending on the
form of their organization, as cooperatives or firms. For our purposes, it suffices to conclude that sugar mills fall
under one of the categories or recipients listed in Article 9.1(a).
529 Brazil's first written submission, paras. 201, 206, 211, 215, 220, and 226.
530 Australia's first written submission, para. 292; opening statement at the first substantive meeting of
the Panel, para. 59.
531 Guatemala's first written submission, para. 283.
532 Brazil's second written submission, para. 89 and response to Panel question No. 55; Australia's first
written submission, paras. 293 -294 and second written submission, para. 110; Guatemala's second written
submission, paras. 73-78, response to Panel question No. 55.
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a subsidy is sufficient for there to be "the provision" of a subsidy within the meaning of Article 9.1(a)
of the Agreement on Agriculture.533
7.242. In response, India argues that the complainants failed to demonstrate the existence of a
financial contribution and benefit with respect to the three Schemes.534 First, India explains that "the
complainants have not met their burden to demonstrate [the] 'ma king' of [a] financial contribution
such that they can show [that] there is a financial contribution".535 In India's view, "[t]he use of the
operative term 'is' in Article 1.1(a)(1) [of the SCM Agreement] indicates that a subsidy can be said
to 'exist' only where the government has actually made a 'financial contribution' under the challenged
measures."536 Thus, according to India, actual transfers of funds are required for a subsidy to
exist.537 Second, India submits that the complainants failed to identify any benchmark in a relevant
market to demonstrate the existence of a benefit , and merely presumed that a benefit exists. 538
India disagrees with the complainants' assertion that grants, by their very nature, confer a benefit
on a recipient .539 In India's view , "[t]here is no such universal principle that grants always and
automatically result in conferring a benefit on their recipient, without any further need to undertake
an assessment as required under the SCM Agreement."540
7.243. We recall that, to fall under Article 9.1(a) of the Agreement on Agriculture, a measure must
be "a direct subsid [y], including payments in kind". There are two elements in this enquiry: first,
the measure must be a "subsid[y]", and second, the subsidy must be "direct". The parties agree541,
and we share their view, that Article 1.1 of the SCM Agreement provides relevant context for
interpreting the term "subsid[y]" in Article 9.1 of the Agreement on Agriculture.542 Pursuant to Article
1.1 of the SCM Agreement, a subsidy shall be deemed to exist if there is a financial contribution by
a government or any public body and a benefit is thereby conferred. 543 India argues that the
complainants have failed to demonstrate the existence of both financial contribution and benefit.
7.244. In our assessment, we first examine whether the assistance under the Production Assistance,
the Buffer Stock, and the Marketing and Transportation Schemes is a "subsidy", i.e. whether there
is a financial contribution that confers a "benefit". If we find that these Schemes constitute subsidies,
we will then assess whether such subsidies are "direct" within the meaning of Article 9.1(a) of the
Agreement on Agriculture.
Whether there is "a financial contribution"
7.245. The complainants assert that, under the Production Assistance, the Buffer Stock, and the
Marketing and Transportation Schemes, there is a financial contribution in the form of a direct
transfer of funds within the meaning of Article 1.1(a)(1)(i) of the SCM Agreement .544 More
specifically, the complainants argue that sugar mills receive a financial contribution in the form of a

533 Brazil's second written submission, paras. 92 -97; Australia's second written submission,
paras. 104-107; Guatemala's second written submission, paras. 61-72. Costa Rica, Japan, and the United States
support the complainants' view. ( Costa Rica's third -party submission, paras. 17 –25; Japan's third -party
statement, paras. 7–9; United States' third-party submission, paras. 47–54)
534 India's first written submission, para. 110 and response to Panel question No. 39.
535 India's first written submission, para. 107. (emphasis and underlining original)
536 India's first written submission, para. 107. (emphasis original)
537 India's second written submission, paras. 67-89.
539 India's second written submission, para. 92 (referring to Australia's first written submission, para. 269
and Guatemala's opening statement at the first substantive meeting of the Panel, para. 4.18).
540 India's second written submission, para. 93. (emphasis original) In this regard, India submits that the
assessment of benefit in the context of a marketplace is necessary. According to India, while certain prior panels
have observed that grants place a re cipient in a better position, this is not a priori true for all cases.
541 Brazil's first written submission, para. 191; Australia's first written submission, para. 266; Guatemala's
542 We note that, in previous disputes, the definition of the term "subsidy" in Article 1.1 of the
SCM Agreement was also considered to be relevant context for interpreting the term "subsidy" in the Agreement
on Agriculture. (Panel Report, US – FSC, para. 7.1 50; Appellate Body Reports, Canada – Dairy, para. 87;
US - Upland Cotton, para. 571)
543 Appellate Body Report, US – Carbon Steel (India), para. 4.8.
544 Australia's first written submission, para. 394; Guatemala's first written submission, para. 314.
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grant.545 The complainants further submit that India's argument that evidence of actual
disbursements is requi red to demonstrate the existence of a "financial contribution" within the
meaning of Article 1.1(a)(1) of the SCM Agreement and, therefore, "direct subsidies" under
Article 9.1(a) of the Agreement on Agriculture, is not supported by the text of either Agre ement.
According to the complainants, a promise by a government to make payments under a scheme,
combined with a budgetary allocation towards the scheme, are actions by which the government
makes funds available to eligible recipients. 546 In support of thei r position, the complainants note
that, pursuant to Article 9.2(a)(i) of the Agreement on Agriculture, the existence of a subsidy may
be demonstrated on the basis of an allocation of funds alone.547 They also point out that, pursuant
to Article 1.1(a)(1)(i) of the SCM Agreement, a "financial contribution" may be made through
"potential direct transfers of funds ".548 The complainants also argue that, in any event, the record
in these proceedings contains evidence showing that the Indian government has made
disbursements pursuant to the challenged export subsidy schemes.549
7.246. India argues that, to establish the existence of an export subsidy under Article 9.1 of the
Agreement on Agriculture, it is necessary to demonstrate that an actual disbursement of funds took
place.550 India stresses that the use of the operative term "is" in Article 1.1(a)(1) of the
SCM Agreement indicates that a subsidy can only be said to exist where the government "has
actually made" a financial contribution.551
7.247. As for the third parties, Costa Rica , Japan, and the United States disagree with India's
argument that Article 1.1(a)(1) of the SCM Agreement requires a demonstration that the financial
contribution has actually been made to establish the existence of a subsidy. 552 In this regard, the
United States notes that, pursuant to Article 9.2(a)(i) of the Agreement on Agriculture, export
subsidy commitments are measured based on allocation or incurrence. Furthermore, the U nites
States points out that demonstrating the existence of a subsidy under the SCM Agreement does not
require showing that a direct transfer of funds has been made to, or received by, the recipient. 553
The United States submits that it "is not aware of any dispute in which a panel or the Appellate Body
has imposed such an evidentiary burden as India suggests on a complainant."554 Finally, the United
States notes that Members can challenge subsidies under the SCM Agreement on an "as such"
basis.555
7.248. We first address India's interpretative argument that it is necessary to provide evidence of
an actual disbursement of funds to establish the existence of a financial contribution. We note that
Article 9.1(a) of the Agreement on Agriculture concerns "the provision … of direct subsidies " by
governments or their agencies. The verb "provide" is defined, inter alia, as "to supply (something)
for use" or " to make available" .556 This definition suggests that something is "provided" not only
when it has been supplied or dis tributed to the recipient, but also when it has simply been made
available.
7.249. Turning to the immediate context of Article 9.1(a), we note that Article 9.2(a)(i) of the
Agreement on Agriculture stipulates that Members may have expressed their scheduled expor t
subsidy reduction commitments in terms of budgetary outlay reduction commitments , and
recognizes that compliance with these commitments in any given year is measurable on the basis

545 Brazil's first written submission, paras. 201, 206, 211, 215 -216, 220 -221, and 223 -224;
Australia's first written submission, paras. 294, 307 -308, and 346; Guatemala's first written submission,
para. 314.
546 Australia's second written submission, para. 105; Guatemala's second written submission, para. 67.
547 Australia's second written submission, para. 106.
548 Australia's second written submission, para. 107; Guatemala's second written submission, para. 69.
549 Notes on Demands for Grants, 2020-2021, (Exhibit JE-142), Notes 10 and 13; Dhampur Sugar Mills
Limited Annual Report 2019-20, (Exhibit JE-149), p. 161, sub-note 1(i).
550 India's second written submission, paras. 67 and 72-73.
551 India's first written submission, para. 107. (emphasis original)
552 Costa Rica's third-party submission, paras. 17 -25; Japan's third -party statement paras. 7 -9; United
553 United States' third-party submission, paras. 49-50.
554 United States' third -party submission, para. 51 (referring to Panel Report, India – Export Related
Measures).
555 United States' third-party submission, para. 53.
556 Oxford English Dictionary online, definition of "provide"
https://www.oed.com/view/Entry/153448?rskey=sAyZXB&result=2&isAdvanced=false#eid (accessed
22 July 2021).
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of budgetary outlays "allocated or incurred" . This provision demonstrates that export subsidy
commitments may be measured based on an allocation of budgetary outlays. Accordingly, in our
view, the existence of a subsidy for purposes of Article 9.1(a) may be demonstrated based on
allocation of funds towards that subsidy and does not necessarily require a demonstration of an
actual disbursement of such funds.
7.250. India underscores the use of the verb "is" in Article 1.1(a)(1) of the SCM Agreement . We
note that, pursuant to Article 1.1(a)(1)(i), there " is a financial contribution"557, inter alia, where a
"government practice" "involves a direct transfer of funds" or "potential direct transfers of funds",
such as loan guarantees. Thus, a financial contribution is deemed to exist if a government practice
is shown to "involve[]" either a direct transfer of funds, or potential direct transfers of funds. The
verb "involve" is defined as "t o include; to contain, imply" or to "entail".558 Accordingly, a financial
contribution may be found to exist where a government practice entails or implies a direct transfer
of funds, which, in our view, does not necessarily require an actual disbursement of funds. Indeed,
had the drafters intended to indicate that an actual direct transfer of funds is necessary for a financial
contribution to exist, different wording (e.g. "a government practice consists of an actual direct
transfer of funds") would have been used in Article 1.1(a)(1)(i).559
7.251. Furthermore, Article 1.1(a)(1)(i) provides that a financial contribution may take the form of
"potential direct transfers of funds". This provision thus contemplates that a financial contribution
may be made through possible transfers of funds in the future. This context further confirms that,
contrary to India's arguments, the demonstration of an actual disbursement of funds is not necessary
to establish the existence of a financial contribution under Article 1.1(a)(1) of the SCM Agreement.
Rather, the existence of a financial contribution may be established based on the text of a legal
instrument implementing a subsidy, which commits a government to provide a financial contribution
to a recipient.560 This view is also supported by findings made in previous disputes.561
7.252. Each of the legal instruments implementing the three Schemes envisages a provision of
funds from the Central Government to sugar mills.562 Furthermore, the complainants have provided
evidence showing that the Central Government made budget ary allocations and actual
disbursements under the three Schemes.563 In our view, this evidence clearly demonstrates that the
Production Assistance, the Buffer Stock, and the Marketing and Transportation Schemes "involve[]

557 Emphasis added.
558 Oxford English Dictionary online, definition of "involve"
https://www.oed.com/view/Entry/99206?redirectedFrom=involve#eid (accessed 22 July 2021).
559 In the same vein, the panel in Brazil - Aircraft stated:
[A]ccording to Article 1:1(i) a subsidy exists if a government practice involves a direct tran sfer of
funds or a potential direct transfer of funds and not only when a government actually effectuates
such a transfer or potential transfer (otherwise the text of (i) would read: "a government directly
transfers funds … or engages in potential direct transfers of funds or liabilities").
560 We agree with the United States' observation that, if India's arguments were accepted, a complainant
would be prevented from demonstrating the existence of a subsid y because it did not have access to specific
evidence of payment information, which would shield respondents from potential liability under the WTO
Agreements and incentivize non-transparency. (United States third-party submission, para. 50)
561 For example, the Appellate Body in US – Large Civil Aircraft (2nd complaint) stated that a "direct transfer
of funds" refers to "conduct on the part of the government by which money, financial resources, and/or financial
claims are made available to a recipient. (Appellate Body Report, US – Large Civil Aircraft (2nd complaint), para.
614 (emphasis added) ) Furthermore, the panel in EC and certain member States – Large Civil Aircraft
(Article 21.5 – US) considered that the fact that some disbursements under a subsidy programme were yet to
be made, did not "preclude the entirety of the envisaged … measures from being characterised as a direct transfer
of funds". (Panel Report EC and certain member States – Large Civil Aircraft (Article 21.5 – US), para. 6.290)
562 For example, the Notification implementing the Marketing and Transportation Scheme states that
"[s]ugar mills … will be eligible for assistance". (Notification of 12 September 2019, (Exhibit JE-114), para. 2)
Likewise, legal instruments implementing the Production Assistance Scheme state "[m]ills … will be eligible for
assistance" and that "sugar mills shall be entitled for the production subsidy". (Notification of 9 May 2018,
(Exhibit JE-75), para. 2; Notification of 2 December 2015, (Exhibit JE-76), para. 2(i); Notification of 5 October
2018, (Exhibit JE-74), para. 2) Legal instruments implementing the Buffer Stock Scheme state that "funds [are]
to be provided to the sugar mills". (Notification of 31 July 2019, (Exhibit JE-77), para. 1; Notification of 15 June
2018, (Exhibit JE-78), para. 1)
563 Notes on Demands for Grants, 2018-2019, (Exhibit AUS-48); Notes on Demands for Grants,
2019-2020, (Exhibit JE-121); Notes on Demands for Grants, 2020-2021, (Exhibit JE-142); Dhampur Sugar
Mills Limited Annual Report 2019-2020, (Exhibit JE-149); Balrampur Chini Mills Limited Annual Report
2019-2020, (Exhibit JE-157); Avadh Sugar & Energy Limited Annual Report 2019-2020, (Exhibit JE-158).
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a direct transfer of funds " within the meaning of Art icle 1.1(a)(1)(i) of the SCM Agreement. As
explained below, the funds are provided to sugar mills without an obligation to provide anything in
return and therefore constitute grants.564
7.253. In light of the above, we conclude that, under the Production Assistanc e, the Buffer Stock,
and the Marketing and Transportation Schemes, the Central Government provides a financial
contribution to sugar mills in the form of grants within the meaning of Article 1.1(a)(1)(i) of
the SCM Agreement.
Whether the financial contributions confer a "benefit"
7.254. We now examine whether the complainants have demonstrated the existence of a "benefit"
within the meaning of Article 1.1(b) of the SCM Agreement.
7.255. The complainants point out that a grant automatically leaves the recipient better off than it
would have been absent the grant.565 The complainants submit that the financial contributions under
the Production Assistance, the Buffer Stock, and the Marketing and Transportation Schemes are
grants because sugar mills are not required to provide anything in return to the Central
Government.566 In the complainants' view, by receiving these gratuitous contributions, sugar mills
are automatically p laced in a better position than they would have otherwise been absent the
grant.567
7.256. India argues that grants do not "always and automatically result in conferring a benefit on
their recipient"568 and that the complainants failed to identify any benchmark in a relevant market
to demonstrate the existence of a benefit and merely presumed that a benefit exists.569 According
to India, an assessment of "benefit" must be made in the context of a marketplace. 570 India points
out that, on the one hand, the complainants claim that India's marketplace is heavily distorted, yet,
on the other hand, they d o not identify an undistorted market for performing a comparison. 571
Furthermore, India submits that there is no benefit to sugar mills because the cost of production of
sugar is very high, which makes sugar mills uncompetitive in the export market.572
7.257. Under Article 1.1(b) of the SCM Agreement, a financial contribution by a government is a
"subsidy" if "a benefit is thereby conferred". A benefit within the meaning of Article 1.1(b) is an
"advantage"573 to the recipient of the financial contribution. The term " benefit", as used in
Article 1.1(b), "implies some kind of comparison" to determine whether "the 'financial contribution'
makes the recipient 'better off' than it would otherwise have been, absent that contribution".574 The
marketplace provides an appropriate basis for comparison in determining whether a "benefit" has
been "conferred", because the trade-distorting potential of a "financial contribution" can be identified
by determining whether the recipient has received a "financial contribution" on terms more
favourable than those available to the recipient in the market.575

564 See paras. 7.258-7.261 below.
565 Brazil's opening statement at the second substantive meeting of the Panel, para. 58; Australia's second
written submission, para. 110; Guatemala's second written submission, paras. 75-77.
566 Australia's second written submission, para. 110; Guatemala's second written submission, para. 77.
567 Brazil's opening statement at the second substantive meeting of the Panel, paras. 59 -60; Australia's
568 India's second written submission, para. 93. (emphasis original)
570 India's second written submission, para. 94.
571 India's second written submission, para. 96.
572 India's second written submission, para. 97.
573 Appellate Body Reports, Canada – Aircraft, paras. 154-156; Canada – Renewable
Energy / Canada - Feed-in Tariff Program, para. 5.150; and Panel Report, US – Tax Incentives, para. 7.159.
574 Appellate Body Report, Canada – Aircraft, para. 157. See also Appellate Body Report, EC and certain
member States – Large Civil Aircraft (Article 21.5 - US), para. 5.1 07; Panel Report, US – Tax Incentives ,
para. 7.159.
575 Appellate Body Report, Canada – Aircraft, para. 157. See also Appellate Body Report, EC and certain
member States – Large Civil Aircraft (Article 21.5 - US), para. 5.107; and Panel Report, US – Tax Incentives,
para. 7.159. Article 14 of the SCM Agreement confirms that the focus of the analysis is on the recipient, and that
benefit is assessed by reference to th e conditions that would exist in the market in the absence of the financial
contribution. (Appellate Body Report, Canada – Aircraft, paras. 155 and 158)
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7.258. The type of financial contribution relevant to our examination of the three Schemes at issue
is a direct transfer of funds in the form of a grant with in the meaning of Article 1.1(a)(1)(i) of the
SCM Agreement.576 Grants are transactions in which money or money's worth is given to a recipient,
normally without an obligation or expectation that anything will be provided to the grantor in
return.577 Since grants do not involve a reciprocal obligation on the part of the recipient, they would
not be made by a private entity acting pursuant to commercial considerations. 578 By their nature,
grants confer a benefit to the recipient because they place the recipient in a better position than the
recipient otherwise would have been in the marketplace.579
7.259. India asserts that grants do not " always and automatically result in conferring a benefit on
their recipient". 580 Rather, according to India, "an assessment of benefit in the context of a
marketplace is necessary".581 We agree with India that an assessment of whether a benefit has been
conferred implies an examination of whether the financial contribution makes the re cipient better
off than it would otherwise have been , and that a marketplace provides an appropriate basis for
such a comparison.582 However, in the case of grants, which essentially are gifts from a government,
such an inquiry is a simple one. When given t o an entity operating in the marketplace, a grant
automatically makes the recipient " better off" than it would otherwise have been because it gives
that recipient greater resources than it had before, to allow it to pursue its commercial aims, and
the grant does not entail any specific reciprocal obligation on the part of the recipient.
7.260. Referring to the panels' findings in Canada – Renewable Energy / Canada -Feed-in Tariff
Program, India argues that the complainants have not identified the relevant market for performing
a comparison on whether a benefit has been conferred and thus failed to demonstrate the existence
of a benefit. 583 In this regard, we note that, while for some types of financial contribution an
elaborate analysis and definition of the relevant market would be appropriate584, this is not the case
for all types of financial contribution. In the case of grants, the market, however defined, does not
make such gifts.585 We therefore disagree with India that the complainants have failed to properly
identify a marketplace for purposes of the "benefit" analysis.586
7.261. Under the Production Assistance, Buffer Stock, and Marketing and Transportation Schemes,
sugar mills receive assistance from the Central Government, which is aimed at enabling them to
clear their sugarcane dues to farmers. Although, pursuant to the payment arrangements under the
three Schemes, the assistance is credited by the Central Government directly into the accounts of
sugarcane farmers on behalf of sugar mills, we consider that the benefit accrues to sugar mills and
not to farmers. 587 Such assistance is gratuitous, and thus constitutes grants. In our view, by

576 Article 1.1(a)(1)(i) provides an illustrative list of transactions that would constitute direct trans fers of
funds ("e.g. grants, loans, and equity infusion"). See Appellate Body Reports, US – Large Civil Aircraft
(2nd complaint), para. 615; Japan – DRAMs (Korea), para. 251; Panel Report, India – Export Related Measures,
para. 7.427.
577 Appellate Body Report, US – Large Civil Aircraft (2nd complaint), para. 616; Panel Report, India - Export
Related Measures, para. 7.436.
578 Appellate Body Report, US – Large Civil Aircraft (2 nd complaint), para. 617; Panel Reports,
India - Export Related Measures, para. 7.436; US – Large Civil Aircraft (2nd complaint), para. 7.1229.
579 Panel Reports, US – Upland Cotton, paras. 7.1116 and 7.1118; EC and certain member States – Large
Civil Aircraft, para. 7.1501; and US – Large Civil Aircraft (2nd complaint), paras. 7.1228-7.1229 and 7.1362.
580 India's second written submission, para. 93. (emphasis original)
581 India's second written submission, para. 94. (emphasis original)
582 See para. 7.256 above.
583 India's second written submission, paras. 95 -96 (referring to Panel Reports, Canada – Renewable
Energy / Canada-Feed-in Tariff Program, paras. 7.272-7.274). India explains that "[t]he complainants' claim that
India's sugar and sugarcane market is heavily distorted requires them to identify an undistorted market separate
from the market in which the transaction between the government and sugar mills is executed." (Ibid. para. 96)
584 For example, this may be the case for financial contributions in the form of provision or purchase of
goods under Article 1.1(a)(1)(iii) of the SCM Agreement, where it is necessary to assess the adequacy of
remuneration, as was the case in Canada – Renewable Energy / Canada-Feed-in Tariff Program.
585 See also Panel Report, India – Export Related Measures, para. 7.466.
586 We further note India's argument that there is no benefit to sugar mills because the cost of production
of sugar is very high, which makes sugar mills uncompetitive in the export market . (India's second written
submission, para. 97) India's assertion that its sugar mills would be uncompetitive in the absence of these grants
further reinforces our view that the sugar mills incur a benefit from receiving these grants. Assuming India's
assertion to be true, we do not see how India could consider that the financial resources being provided without
consideration, which in India's view increases the recipients' competitiveness, would not confer a "benefit" within
the meaning of either the SCM Agreement or the Agreement on Agriculture.
587 See para. 7.237 above.
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receiving such grants, sugar mills are automatically placed in a better position than they would have
been absent the grants, and thus receive a benefit.
7.262. In light of the above, we conclude that the financial contributions under the Production
Assistance, the Buffer Stock, and the Marketing and Transportation Schemes confer a benefit on
sugar mills within the meaning of Article 1.1(b) of the SCM Agreement. Since these Schemes confer
a financial contribution and a benefit within the meaning of the SCM Agreement, we further conclude
that they constitute "subsidies" within the meaning of Article 9.1 of the Agreement on Agriculture.
Whether the subsidies are "direct"
7.263. The complainants submit that the subsidies under the Production Assistance, Buffer Stock,
and Marketing and Transportation Schemes are "direct" within the meaning of Article 9.1(a) of the
Agreement on Agriculture because they are provided to sugar mills by the Indian Government in a
straightforward and immediate manner. 588 In this regard, Australia and Guatemala explain that,
under the Production Assistance, Buffer Stock, and the Marketing and Transportation Schemes,
monies are deposited by the Indian Government "directly" into bank accounts opened for the purpose
of receiving the subsidies.589
7.264. India does not comment on the complainants' arguments regarding this issue.
7.265. As noted above590, in our view, the term "direct" in Article 9.1(a) indicates that the subsidy
must be provided from the grantor to the recipient in a straightforward and immediate manner.
7.266. Turning to the requirements of the three Schemes, we recall that, to receive a subsidy, sugar
mills are required to open a separate no -lien account in a bank and furnish to the bank the list of
farmers and their bank account d etails, as well as information about the extent of sugarcane price
dues payable to the farmers for the relevant sugar season. The bank credits the assistance to the
farmers' accounts on behalf of sugar mills, and any subsequent balance is credited into the sugar
mills' accounts. 591 As explained above 592, although the assistance is credited directly into the
accounts of farmers on behalf of sugar mills, we consider sugar mills to be the recipients of the
subsidies. Thus, the modalities of disbursement of the subsidies demonstrate that the subsidies are
provided by the Central Government to sugar mills in a straightforward and immediate manner.
7.267. We therefore conclude that the subsidies under the Production Assistance, Buffer Stock, and
Marketing and Transportatio n Schemes are "direct" within the meaning of Article 9.1(a) of the
Agreement on Agriculture.593
7.2.4.5.3.4 Whether the subsidies are "contingent on export performance"
7.268. We have found that the provision of assistance to sugar mills under the Production
Assistance, the B uffer Stock, and the Marketing and Transportation Schemes constitute direct
subsidies within the meaning of Article 9.1(a) of the Agreement on Agriculture. We now examine
whether these subsidies are "contingent on export performance".

588 Australia's first written submission, para. 292; Guatemala's first written submission, para. 285.
589 Australia's first written submission, para. 292; Guatemala's first written submission, para. 285. For its
part, Brazil asserts that "[b]ecause the payment is made by the Central Government without full consideration,
it constitutes a 'direct subsidy', within the meaning of Article 9.1(a) of the Agreement on Agriculture."
(Brazil's first written submission, para. 201)
590 See para. 7.225 above.
591 Notification of 2 December 2015, (Exhibit JE-76), para. 2(v) -(vi); Notification of 9 May 2018,
(Exhibit JE-75), para. 3(iv) -(v); Notification of 5 October 2018, (Exhibit JE-74), para. 3(iv); Notifi cation of 31
July 2019, (Exhibit JE-77), para. 9(a); Notification of 15 June 2018, (Exhibit JE-78), para. 9(a); Notification of
592 See para.7.237 above.
593 We wish to underline that our findings reflect the characteristics of the subsidies at issue in these
proceedings, in particular the fact that, under these subsidies, assistance is provided from the Central
Government to sugar mills without an intermediary. By making these findings, we are not taking any position on
whether a subsidy granted by a government or its agency through an intermediary would constitute a "direct"
subsidy within the meaning of Article 9.1(a) of the Agreement on Agriculture.
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7.269. The complainants claim that the subsidies under the three Schemes are "contingent on
export performance" under Article 9.1(a) of the Agreement on Agriculture . With respect to the
Production Assistance and Buffer Stock Schemes, the complainants assert that the p rovision of
assistance under those Schemes is conditioned upon the sugar mills ' compliance with export
allocations under MIEQ orders.594 Similarly, the complainants argue that the provision of assistance
under the Marketing and Transportation Scheme is cond itioned upon sugar mills exporting at least
50% of their MAEQ allocation.595
7.270. India does not submit any specific arguments in response to the complainants' allegations
of export contingency.
7.271. We recall that, due to the textual similarity between the two provisions, the requirement of
export contingency has the same meaning under Article 9.1(a) of the Agreement on Agriculture and
Article 3.1(a) of the SCM Agreement .596 Export contingency in the context of Article 3.1(a) of the
SCM Agreement has been interpreted to refer to subsidies that are conditional upon export
performance, or are dependent for their existence on export performance. 597 To demonstrate such
a relationship of conditionality or dependence, it has to be shown that the granting of a subsidy is
"tied to" the export performance.598 We find this interpretation convincing and consider it appropriate
to rely on it in applying Article 9.1(a) of the Agreement on Agriculture.
7.272. With respect to the Production Assistance Scheme, we recall that assistance under this
Scheme is provided to sugar mills on a seasonal basis "to offset the cost of cane and facilitate timely
payment of cane price dues of farmers" for the relevant sugar season. 599 Pursuant to one of the
eligibility criteria under the Scheme, to receive a subsidy in the 2017-18 and 2018-19 sugar seasons,
sugar mills "should have fully complied with all the orders/directives of the [DFPD] to the sugar
mills" for the relevant sugar season.600 In this regard, we recall that the MIEQs are orders issued by
the DFPD pursuant to Section 3 of the Essential Commodities Act and Clause 5 of the Sugar (Control)
Order.601 Consequently, to be eligible for a subsidy under the Production Assistance Scheme, sugar
mills must have fully complied with their individual export allocations under the MIEQ, i.e. they must
have exported a certain amount of sugar during the relevant sugar season.602 Eligibility for a subsidy
under the Production Assistance Scheme is therefore conditional on export performance within the
meaning of Article 9.1(a).
7.273. With regards to the Buffer Stock Scheme, we recall that, under this Scheme, sugar mills
receive a subsidy in respect of the quantity of buffer stock maintained .603 We note that an
amendment to the Buffer Stock Scheme 2018 of 31 December 2018 provides that, to be eligible for
the subsidy, a sugar mill must "fully comply with all the orders/directives" issued by the DFPD for
compliance during the 2018-19 season. 604 As explained above, such orders include the MIEQs. Thus,
to be eligible for a subsidy under the Buffer Stock Scheme 2018, sugar mills were required to have

594 Brazil's first written submission, paras. 202-203, 207-208, 212, 216-217, 221; Australia's first written
submission, paras. 297 -304 and 310 -342; Guatemala's first written submission, para. 289. Australia submits
that India's subsidies under the Buffer Stock Sc heme are, in the first instance, de jure contingent and, in the
alternative, de facto contingent on export performance . (Australia's first written submission, paras. 278 and
310-341)
595 Brazil's first written submission, paras. 227-228; Australia's first written submission, paras. 348-351;
Guatemala's first written submission, para. 289.
596 See para. 7.228 above.
597 Appellate Body Report, Canada – Aircraft, para. 166.
598 Appellate Body Report, US – FSC (Article 21.5 – EC), para. 111.
599 Notification of 2 December 2015, (Exhibit JE-76), preamble and para. 1; Notification of 9 May 2018,
(Exhibit JE-75), preamble and para. 1; and Notification of 5 October 2018, (Exhibit JE-74), preamble and para. 1.
See also paras. 7.130-7.131 above.
600 Notification of 9 May 2018, (Exhibit JE-75), para. 2(c); Notification of 5 October 2018, (Exhibit JE-74),
para. 2(c). Similarly, in order to be eligible for a subsidy in the 2015-16 sugar season, sugar mills had to achieve
at least 80% of their MIEQ allocation. (Notification of 2 December 2015, (Exhibit JE-76), para. 2.iii)
601 See para. 7.125 above.
602 Pursuant to the proforma application form for the 2017 -18 and 2018-19 sugar seasons, a sugar mill
had to indicate whether it has complied with all the orders /directives of the DFPD, and to submit relevant
supporting documents. ( Notification of 9 May 2018, ( Exhibit JE-75), Proforma A, para. 3(e); Notification of
5 October 2018, (Exhibit JE-74), Proforma A, para. 3(e)) Likewise, pursuant to the proforma application form for
the 2015 -16 sugar season, a sugar mill had to indicate the amount of sugar exported. (Notification of
2 December 2015, (Exhibit JE-76), Proforma A, para. 3(e))
603 See para. 7.137 above.
604 Notification of 31 December 2018, (Exhibit JE-112), para. 2.
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fully complied with their individual export allocations under the MIEQ in the 2018-19 sugar season.
Eligibility for a subsidy under the Buffer Stock Scheme 2018 was therefore conditional on export
performance within the meaning of Article 9.1(a).
7.274. The Buffer Stock Scheme 2019 does not frame the eligibility criteria in the same way as the
Buffer Stock Scheme 2018. Nevertheless, pursuant to the Buffer Stock Scheme 2019, the Central
Government takes sugar mills' MIEQ compliance into account in determining the quantity of buffer
stock that a mill is allocated to hold. Specifically, if a sugar mill failed to export any quantity of the
sugar that it was required to export un der the relevant MIEQ order before June 2019, the total
amount of its MIEQ allocation would be deducted from its buffer stock.605 We recall that the amount
of the buffer stock subsidy is determined on the basis of the value of buffer stock that sugar mills
have been allocated to hold, at the rate of INR 31 per kilogram of sugar. 606 Accordingly, the higher
the amount of buffer stock a sugar mill is allocated to hold, the higher its value, and, as a result,
the higher the amount of the subsidy that the sugar mill would receive. As noted, if a sugar mill fails
to export any quantity of sugar in fulfilment of its MIEQ allocation, the amount equivalent to its
overall MIEQ allocation would be deducted from the quantity of buffer stock that it would otherwise
be allowed to hold. As a result, a sugar mill would be permitted to hold less buffer stock and would
therefore receive a lower subsidy. In short, we understand that under the Buffer Stock Scheme
2019, the amount of the subsidy received by sugar mills depends dire ctly on the amount of sugar
that they export. In other words , the amount of the subsidy sugar mills receive is "tied to" , i.e.
"contingent on", export performance, within the meaning of Article 9.1(a).607
7.275. Turning to the Marketing and Transportation Scheme, we recall that, under this Scheme,
sugar mills receive assistance in the form of a lump sum for payment of sugarcane price dues of
farmers for the sugar season 2019 -20 and sugarcane price arrears of previous sugar seasons .608
One of the eligibility criteria under the Scheme is that "sugar mills should have exported sugar up
to the extent of their [MAEQ] determined by the Central Government for such mills for the sugar
season 2019-20".609 More specifically, to be eligible for the assistance, a sugar mill is re quired to
export at least 50% of its MAEQ. 610 In this regard, we recall that the MAEQ order imposes the
maximum admissible export quantity of sugar of 6 million ton nes, which is divided among sugar
mills.611 Accordingly, to be eligible for assistance under the Marketing and Transportation Scheme,
a sugar mill is required to have fulfilled at least 50% of its export target under the MAEQ order.
Eligibility for a subsidy under the Marketing and Transportation Scheme is therefore conditional on
export performance within the meaning of Article 9.1(a).
7.276. In light of the above, we conclude that the subsidies under the Production Assistance, the
Buffer Stock, and the Marketing and Transportation Schemes are contingent on export performance
within the meaning of Article 9.1(a) of the Agreement on Agriculture.

605 The Buffer Stock Scheme 2019 provides in this regard:
In case a sugar mill has failed to export any quantity up to June, 2019 against the MIEQ issued
vide directive dated 28.09.2018 of DFPD, its stock shall be considered after deducting the quantity
equivalent to its allocated MIEQ.
(Notification of 31 July 2019, (Exhibit JE-77), para. 2)
606 Notification of 31 July 2019, (Exhibit JE-77), paras. 3(a)-3(d).
607 Having found that the Buffer Stock 2019 is, on its face, contingent on export performance, we do not
need to address Australia's alternative argument regarding the alleged de facto export contingency.
(Australia's first written submission, para. 319)
608 See paras. 7.140-7.141 above.
609 Notification of 12 September 2019, (Exhibit JE-114), para. 2(a).
610 Notification of 12 September 2019, (Exhibit JE-114), para. 2(a). Sugar mills are required to submit
evidence of their export performance as part of their application for assistance under the Marketing and
Transportation Scheme. (Ibid. Proforma-A, paras. 5 and 9)
611 Cabinet Committee on Economic Affairs Announcement of Sugar export policy for evacuation of surplus
stocks during sugar season 2019 -20, (Exhibit JE-113); MAEQ Order of 16 September 2019 , (Exhibit JE-115),
Annexure. We note that, although the MAEQ order refers to the " maximum admissible export quantity", the
MAEQ is fixed at 6 million tonnes of sugar, which is higher than the MIEQ of 5 million tonnes set for the 2018-19
sugar season.
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7.2.4.5.4 Duty Free Import Authorization (DFIA) Scheme
7.2.4.5.4.1 Introduction
7.277. Australia claims that the DFIA Scheme, which exempts eligible sugar mills from paying
customs duties on imports of raw sugar on account of past export s of white sugar , is a subsidy
contingent on export performance within the meaning of Article 9.1(a) of th e Agreement on
Agriculture.612 In response to India's argument under footnote 1 to the SCM Agreement, Australia
underlines that the "DFIA attaches not to the raw sugar consumed in producing the white sugar
exported in 2018, but rather to raw sugar subsequen tly, or yet to be, imported". 613 According to
Australia, the DFIA Scheme does not meet the requirement of footnote 1 to the SCM Agreement
"that the remission or drawback be on an imported product that is consumed in the production of
an exported product" because it allows duty-free imports of raw sugar on account of past exports of
white sugar.614
7.278. India argues that the DFIA Scheme does not constitute a subsidy by virtue of footnote 1 to
the SCM Agreement, read together with paragraph (i) of its Annex I.615 While India agrees that the
DFIA Scheme provides remission of import charges on a post -export basis, India argues that such
remission is commensurate with inputs already consumed in exported products. 616 India submits
that "an exporter is only entitled to claim an exemption on import dut[ies] for future imports of raw
sugar to the extent of the raw sugar that was in fact consumed in the production of exported white
sugar" and that "there exists a verification mechanism to ensure that only the specific inputs actually
consumed in the export product are allowed duty free import under DFIA".617
7.279. We begin by addressing India's allegation that the DFIA Scheme does not constitute a
subsidy under the Agreement on Agriculture because it meets the requirements of footnote 1 to the
SCM Agreement. We will then turn, if necessary, to assess whether the DFIA Scheme as it applies
to sugar is inconsistent with Article 9.1(a) of the Agreement on Agriculture.
7.2.4.5.4.2 Whether the DFIA Scheme does not constitute a subsidy pursuant to
footnote 1 to the SCM Agreement
7.280. Footnote 1 to Article 1 of the SCM Agreement reads:
In accordance with the provisions of Article XVI of GATT 1994 (Note to Article XVI) and
the provisions of Annexes I through III of this Agreement, the exemption of an exported
product from duties or taxes borne by the like product when destined for domestic
consumption, or the remission of such duties or taxes in amounts not in excess of those
which have accrued, shall not be deemed to be a subsidy.
7.281. According to footnote 1, the exemption of an exported product from duties and taxes borne
by the like product , when destined for domestic consumption in amounts not in excess of those
which have accrued, or the remission of such duties, shall not be deemed to be a subsidy. Footnote 1
must be read in accordance with, inter alia, Annexes I to III of the SCM Agreement. Annex I contains
an illustrative list of export subsidies. In particular, paragraph (i) of Annex I refers to "[t]he remission
or drawback of import charges in excess of those levied on imported inputs that are consumed in
the production of the exported product".618 Footnote 58, which is appended to Annex I(i), specifies
that "'[r]emission' of taxes includes the refund or rebate of taxes", whereas "'[r]emission or
drawback' includes the full or partial exemption or deferral of import charges".

612 Australia's first written submission, para. 352.
613 Australia's second written submission, para. 216.
614 Australia's second written submission, para. 217. See also Australia's response to Panel
question No. 85.
615 India's first written submission, paras. 124-125 and 149-155; second written submission, para. 109.
616 India's second written submission, para. 109.
617 India's second written submission, para. 109 (referring to Foreign Trade Policy 2015 -20
(Exhibit AUS-40), para. 4.12; and Foreign Trade Policy, H andbook of Procedures 2015 -20 ( Exhibit IND-21),
para 4.56).
618 Footnote omitted.
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7.282. Pursuant to footnote 1, read together with Annex I(i), for a "remission or drawback" of
import charges to benefit from the shelter of footnote 1, the remission or drawback must not be "in
excess of [import charges] levied on imported inputs that are consumed in the production of the
exported product". Accordingly, to ascertain whether a remission or drawback of duties is not
"deemed to be a subsidy" by virtue of footnote 1, read in conjunction with Annex I(i), a panel has
to examine whether the measure is (i) a remission or drawback; (ii) of import charges; (iii) on
imported inputs that are consumed in the production of the exported product; (iv) not in excess of
those levied on those inputs.619
7.283. Footnote 1 must also be read "in accordance with" Annex II of the SCM Agreement, which
sets out "Guidelines on Consumption of Inputs in the Production Process". Annex II provides the
basis for examining "whether inputs are consumed in the producti on of the exported product". 620
Footnote 61 to Annex II defines "inputs that are consumed in the production process" as " inputs
physically incorporated, energy, fuels and oil used in the production process and catalysts which are
consumed in the course of t heir use to obtain the exported product". 621 Annex II(II)(3) provides
further guidance on the interpretation of this phrase, by stipulating that "[i]nvestigating authorities
should treat inputs as physically incorporated if such inputs are used in the production process and
are physically present in the product exported."622
7.284. In sum, footnote 1, read in conjunction with Annex II of the SCM Agreement, indicates that
imported inputs that are consumed in the production of the exported product must be "used in the
production process" and be "physically present in the product exported". 623 With these
considerations in mind, we now turn to assess the DFIA Scheme.
7.285. India considers that the DFIA Scheme does not constitute a subsidy because it meets the
conditions of footnote 1, read together with paragraph (i) of Annex I to the SCM Agreement. 624 In
response, Australia submits that the DFIA Scheme does not meet the requirement of footnote 1
"that the remission or drawback be on an imported product that is consumed in the production of
an exported product".625
7.286. As noted, to fall under the scope of footnote 1, a measure has to be (i) a remission or
drawback; (ii) of import charges; (iii) on imported inputs that are consumed in the production of the
exported product; and (iv) not in excess of those levied on those inputs.626 Australia and India agree
that the DFIA Scheme is a remission of import charges. 627 However, Australia takes issue with the
third item and argues that "[i]t is physically impossible for raw sugar that is or was imported customs
duty free between 1 October 2019 and 30 September 2021 to have been consumed in the production
of white sugar exported in 2018."628

619 Panel Report, India – Export-Related Measures, para. 7.191.
620 Chapeau of Annex II(II) of the SCM Agreement. Although Part II of Annex II is expressly directed at
this examination "as part of a countervailing duty investigation", this does not make Annex II irrelevant outside
the context of countervailing duty investigations. In our view, Annex II informs the understanding of footnote 1
beyond the context of countervailing investigations. (See Panel Report, India – Export Related Measures ,
para. 7.182)
621 Emphasis added.
622 Emphasis added. Annex II(II)(3) further provides that "an input need not be present in the final product
in the same form in which it entered the production process".
623 Annex II(II)(3) of the SCM Agreement.
624 India's first written submission, paras. 124-125 and 149-155; second written submission, para. 109.
625 Australia's second written submission, para. 217. See also Australia's response to Panel
question No. 85.
626 See para. 7.282 above.
627 Australia's response to Panel question No. 85, para. 118; India's first written submission, paras. 97-98,
124, and 150-155; second written submission, paras. 107 -109. We recall, in this regard, that the difference
between an exemption and a remission is that, in the case of exemptions, the duty or tax liability does not arise,
whereas, in the case of remissions, the liability first arises, but is later remitted, including by returning a payment
that has been made. (Panel Report, India – Export Related Measures, para. 7.169) Based on our own assessment
of the DFIA Scheme, we understand that the DFIA is a "remission" rather than an "exemption" because sugar
mills may receive the DFIA after importation of raw sugar. ( Foreign Trade Policy 2015-2020, (Exhibit AUS-40),
paras. 4.27 and 4.29; India's response to Panel question No. 88 (referring to Exhibits IND-24 and IND-25))
628 Australia's second written submission, para. 218. See also Australia's response to Panel
question No. 85, paras. 116 and 126-128.
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7.287. We recall that the DFIA Scheme allows sugar exporters that exported white sugar between
28 March and 30 September 2018 to claim, on account of such exports , a remission of customs
duties on raw sugar imported between 1 October 2019 and 30 September 2021.629
7.288. As explained above, in our view, footnote 1, read in conjunction with Annex II of the SCM
Agreement, requires that imported inputs be "used in the production process" and be "physically
present in the product exported".630 We agree with Australia that this is not the case under the DFIA
Scheme be cause it provides for duty -free importation of raw sugar (i.e. the input) after the
exportation of white sugar (i.e. the "product exported"). The raw sugar imported between
1 October 2019 and 30 September 2021 is not used in the production process of, and is not
physically present in, the white sugar exported between 28 March and 30 September 2018. Clearly,
therefore, the remission under the DFIA Scheme does not apply to "imported inputs that are
consumed in the production of the exported product", as footnote 1 requires.
7.289. India argues that " an exporter is only entitled to claim an exemption on import duty for
future imports of raw sugar to the extent of the raw sugar that was in fact consumed in the
production of exported white sugar .631 India also points out that "there exists a verification
mechanism to ensure that only the specific inputs actually consumed in the export[ed] product are
allowed [to be imported] duty free … under DFIA".632 As noted above, in our view, to fall within the
scope of footnote 1, the imported inputs that benefit from the remission must be consumed in the
production of the exported product , which is not the case under the DFIA Scheme . As long as this
important requirement is not met, it is immaterial , in our view , whether the quanti ty of inputs
imported duty free subsequent to the exportation of the final product corresponds to the quantity of
inputs used in the production of that final product. We therefore find India's argument unconvincing.
7.290. Finally, we note India's statement that "the DFIA can be transferred from one entity to
another".633 In our view, in the circumstances of this dispute, the transferability of the DFIA further
underscores the disconnect between the imported inputs and the exported final product , since the
importer of the inputs and the exporter of the final product may not be the same entity.
7.291. In light of the above, we conclude that India has failed to establish that the DFIA Scheme
as it applies to sugar falls under the scope of footnote 1 to the SCM Agreement.
7.292. We have concluded that India has failed to establish that the DFIA Scheme for sugar meets
the requirements of footnote 1 of the SCM Agreement . Consequently , we proceed to examine
Australia's claim that the DFIA Scheme is inconsistent with Article 9.1(a) of t he Agreement on
Agriculture.
7.2.4.5.4.3 Whether the DFIA Scheme is inconsistent with Article 9.1(a) of the Agreement
on Agriculture
7.293. Australia claims that the DFIA Scheme is a subsidy contingent on export performance within
the meaning of Article 9.1(a) of the Agreement on Agriculture.634 In this regard, Australia notes that
the assistance under the DFIA Scheme is provided to sugar mills by a government o r its agency
within the meaning of Article 9.1(a). 635 According to Australia, the financial contribution under the
DFIA Scheme is in the form of revenue forgone because the DFIA Scheme creates an exception to a
general rule of taxation. 636 Australia further argues that the DFIA Scheme is a "direct subsid[y]"
within the meaning of Article 9.1(a) because "[t]he sugar mills that benefit from the scheme have a
direct relationship with [the granting authority], without any intermediaries or intervening
factors."637 With respect to the export contingency element, Australia notes that, according to an

629 Amendment to the Foreign Trade Policy 2015-2020, (Exhibit AUS-41), paras. 1-2.
630 See para. 7.283 above.
631 India's second written submission, para. 109.
632 India's second written submission, para. 109 (referring to Notification 01/2015-2020, Foreign Trade
Policy 2015 -20 ( Exhibit AUS-40), pa ra. 4.12; and Foreign Trade Policy, Handbook of Procedures 2015 -20
(Exhibit IND-21), para 4.56).
633 India's response to Panel question No. 85(a). Australia agrees with India's description of this aspect of
the DFIA Scheme. (Australia's response to Panel question No. 86)
634 Australia's first written submission, para. 352.
635 Australia's first written submission, paras. 353 and 362.
636 Australia's first written submission, para. 356.
637 Australia's first written submission, para. 354.
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amendment to the DFIA Scheme o f 28 March 2018, "entities that exported white sugar between
28 March and 30 September 2018 may be eligible to receive [an] import duty exemption between
1 October 2019 and 30 September 2021".638
7.294. Other than its arguments concerning footnote 1 of the SCM Agreement, India does not
present any additional or alternative arguments in response to Australia's allegations under
Article 9.1(a) of the Agreement on Agriculture.
7.295. In examining Australia's claim, we follow the legal standard set out in paragraph 7.222
above. Thus, we assess whether the DFIA is (i) provided by a government or its agency; (ii) to a
firm, to an industry, to producers of an agricultural product, to a cooperative or other association of
such producers, or to a marketing board; (iii) in the form of a direct subsidy, including payments in
kind; and (iv) contingent on export performance.
7.296. Turning to the first element, we note that, as Australia argues, the DFIA Scheme is part of
India's Foreign Trade Policy , which is implemented by the Departme nt of Commerce, Directorate
General of Foreign Trade, a governmental authority within India's Ministry of Commerce and
Industry.639 Applications for the DFIA have to be made to the Regional Authority of the Directorate
General for Foreign Trade. 640 This show s that the DFIA is provided by "governments or their
agencies" within the meaning of Article 9.1(a).
7.297. Second, like the assistance under the Production Assistance, Buffer Stock, and Marketing
and Transportation Schemes, the DFIA is granted to sugar mills. Th us, for the reasons set out in
paragraphs 7.237-7.240 above, we conclude that the DFIA is provided to "producers of an
agricultural product" within the meaning of Article 9.1(a).
7.298. Turning to whether the DFIA scheme represents a "direct subsidy", we recall that a "subsidy"
shall be deemed to exist if there is a "financial contribution by a government or any public body"
and "a benefit is thereby conferred". 641 Regarding financial contributions in the form of revenue
otherwise due that is forgone or not collected, to determine the existence of such a fin ancial
contribution, a comparison must be made between the revenue actually raised and the revenue that
would have been raised "otherwise".642 The relevant tax rules of the Member in question constitute
a basis for comparison in determining what would other wise have been due. In many instances,
such comparison would involve a determination of what a tax or duty rate would be "but for" the
measure at issue.643 Exempting the recipient from a tax or duty that would have otherwise been due
confers a benefit on th e recipient because it would make the recipient better off than it would
otherwise have been.
7.299. The parties do not contest that, "but for" the DFIA Scheme, import duties would be levied
on raw sugar pursuant to Section 2 of India's Custom's Tariff Act 1975 a nd Chapter 17 of India's
First Schedule.644 Therefore, we consider that the DFIA Scheme entails a financial contribution in the
form of revenue otherwise due that is forgone or not collected. 645 We also consider that "a benefit
is thereby conferred" 646 since the remission of duties that otherwise would have to be paid puts
eligible sugar mills in a better -off position than the y would be absent the DFIA. In our view, the
subsidy under the DFIA sche me is a "direct" one , since the financial contribution is provided from

638 Australia's first written submission, para. 364.
639 Foreign Trade Policy 2015-2020, (Exhibit AUS-40).
640 Foreign Trade Policy 2015-2020, (Exhibit AUS-40), para. 4.29(i).
641 See para. 7.225 above.
642 Appellate Body Report, US – FSC, para. 90.
643 Panel Report, US – FSC, para. 7.45. At the same time, we note that, in certain circumstances, it may
be difficult to isolate a "general" r ule of taxation and "exceptions" to the rule. Therefore, an examination under
Article 1.1(a)(1)(ii) must be sufficiently flexible to adjust to the complexities of a Member's domestic rules of
taxation. (See Appellate Body Report, US – FSC, paras. 90-91. See also Appellate Body Report, US – Large Civil
Aircraft (2nd complaint), para. 813)
644 Australia's fist written submission, paras. 357 -358 (referring to Customs Tariff Act 1975,
(Exhibit AUS-38), Section 2 and First Schedule, Chapter 17). As noted , in certa in circumstances, it may be
difficult to isolate a "general" rule of taxation and "exceptions" to the rule, and an examination under
Article 1.1(a)(1)(ii) must be sufficiently flexible to adjust to the complexities of a Member's domestic rules of
taxation. (See Appellate Body Report, US – FSC, paras. 90 -91) In this dispute, no arguments were made by
India to contest the general rule pertaining to the levying of customs duties identified by Australia.
645 Article 1.1(a)(1)(ii) of the SCM Agreement.
646 Article 1.1(b) of the SCM Agreement.
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the Central Government, through its specialized agencies, to sugar mills in a straightforward and
immediate manner.
7.300. We recall that, under the DFIA Scheme, sugar exporters that exported white sugar between
28 March and 30 September 2018 can claim, on account of such exports , a remission of the basic
customs duty on raw sugar imported between 1 October 2019 and 30 September 2021. In other
words, sugar mills can only be eligible for the DFIA if they exported white sugar during the indicated
period. In our view, therefore, the DFIA is "tied to" past export performance and, therefore, is
"contingent" on export performance under Article 9.1(a).
7.301. In light of the above, we conclude that the DFIA Scheme for sugar is inconsistent with
Article 9.1(a) of the Agreement on Agriculture.
7.2.4.6 Guatemala's claim under Article 9.1(c) of the Agreement on Agriculture
7.302. Guatemala claims that, in addition to constituting export subsidies under Article 9.1(a), the
Production Assistance, the Buffer Stock, and the Marketing and Transportation Schemes constitute
payments on the export of sugar that are financed by virtue of governmental action within the
meaning of Article 9.1(c) of the Agreement on Agriculture.647 Guatemala submits that Articles 9.1(a)
and 9.1(c) do not have mutually exclusive application and hence a measure can constitute an export
subsidy under both provisions. 648 Guatemala presents similar arguments for its claim under
Article 9.1(c) as for its claim under Article 9.1(a).649
7.303. We have found that India's Production Assistance, Buffer Stock, and Marketing and
Transportation Schemes are inconsistent with Article 9.1(a). Consequently, we do not consider it
necessary to address Guatemala's claim under Article 9.1( c) of the Agreement on Agriculture
regarding the same Schemes.
7.2.4.7 Overall conclusion under the Agreement on Agriculture
7.304. Above, we have found that, under the Production Assistance, the Buffer Stock, the Marketing
and Transportation, and the DFIA Schemes, Indi a grants to sugar mills direct subsidies contingent
on export performance within the meaning of Article 9.1(a) of the Agreement on Agriculture. Since
India did not make export subsidy reduction commitments with respect to sugar in its Schedule650,
we conclu de that India's subsidies contingent on export performance within the meaning of
Article 9.1(a) are inconsistent with Articles 3.3 and 8 of the Agreement on Agriculture.651
7.2.5 Claims under the SCM Agreement
7.2.5.1 Introduction
7.305. In addition to their claims under the Agreement on Agriculture, Australia and Guatemala
also claim that India's subsidy schemes constitute subsidies de jure contingent upon export
performance under Article 3.1(a) of the SCM Agreement. 652 Their claims under Article 3.1(a) are
largely based on the same arguments and evidence as the claims under Article s 9.1(a) and (c) of
the A greement on Agriculture .653 With respect to India's arguments regarding Article 27 of the
SCM Agreement, Australia and Guatemala assert t hat the text of Article 27.2(b) is unambiguous ,
and that the eight -year export subsidy phase -out period referred to in that provision ended in

647 Guatemala's first written submission, para. 291.
648 Guatemala's first written submission, para. 275.
649 Guatemala's first written submission, paras. 294-297.
650 See paras. 7.174-7.176 above.
651 As a result, we do not address Australia's alternative claim under Arti cle 10 of the Agreement on
Agriculture. (See paras. 7.116 and 7.158 above)
652 Australia's first written submission, paras . 368-369 and 391; Guatemala's first written submission ,
para. 300.
653 Australia's first written submission, paras. 391 -433; Guatemala's first written submission,
paras. 310-321.
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2003.654 In this regard, Australia and Guatemala agree with the interpretation of Article 27.2(b)
developed by the panel in India – Export Related Measures.655
7.306. India argues that Article 3 .1(a) does not apply to India by virtue of Article 27 of the
SCM Agreement, which provides for special and differential treatment for developing countries. 656
India does not dispute that its Gross National Product (GNP) per capita reached USD 1,000 in three
consecutive years and that India graduated from the list of Members identified in Annex VII(b) of
the SCM Agreement in 2017.657 However, in India's view, "a period of eight years from the date of
entry into force of the WTO Agreement " under Article 27.2(b) must start from the date of a
developing country's graduation from Annex VII(b), rather than from the date of entry into force of
the WTO Agreement. 658 India explains that Members ref erred to in Annex VII(b) of the
SCM Agreement "must be subject to the same treatment that is applied to other developing country
Members in Article 27.2(b)", in other words "they are to be provided an eight-year phase out period
with respect to export subsidies". 659 In India's view, an interpretation to the contrary "would
necessarily rend er parts of the SCM Agreement redundant, as against developing countries ".660
Finally, India considers that the interpretation of Article 27 developed by the panel in India – Export
Related Measures "is not binding and has no legal effect in the present disputes" because the appeal
in that dispute is currently pending before the Appellate Body.661
7.307. As third parties, Canada, Costa Rica, and the United States disagree with India's
interpretation of Article 27.2(b). In their view, the "period of eight years from the date of entry into
force of the WTO Agreement" expired on 1 January 2003 , and therefore Article 27.2(b) does not
apply to India.662 The European Union notes that the same issue was comprehensively addressed by
the panel in India – Export Related Measures. Although the panel report in that dispute is subject to
appeal, the European Union considers that it provides useful guidance for the present dispute.663
7.308. We start by addressing India's defence under Article 27.2(b) of the SCM Agreement. We
then turn, if necessary, to assess whether India's subsidy schemes are inconsistent with
Article 3.1(a) of the SCM Agreement.
7.2.5.2 Whether Article 27.2(b) applies to India
7.309. Article 27 of the SCM Agreement is titled "Special and Differential Treatment of Developing
Country Members". Article 27.2 provides:
The prohibition of paragraph 1(a) of Article 3 shall not apply to:

654 Australia's second written submission, paras. 181 -182; Guatemala's second written submission,
paras. 118-119. Canada, Costa Rica, the European U nion, Japan, and the United States, third parties to the
disputes, share Australia's and Guatemala's position. ( Canada's third-party submission, paras. 30 –38; Costa
Rica's third-party submission, paras. 28 –30; European Union's third -party submission, paras . 78–80; Japan's
third-party statement at the first substantive meeting, paras. 10 –12; United States' third -party submission,
paras. 59–62)
655 Australia's second written submission, para. 184; Guatemala's second written submission, paras. 121
and 129.
656 India's first written submission, paras. 127 and 129.
657 India's first written submission, para. 132.
658 India's first written submission, para. 139; opening statement at the first substantive meeting of the
Panel, para. 19. India submits that its interpretati on is consistent with the principle of effectiveness in treaty
interpretation and is supported by the context provided by Articles 27.4 and 27.5 of the SCM Agreement. India
contends that its interpretation is further supported by the negotiating history of the SCM Agreement, in
particular, the Draft Texts by the Chairman of the Negotiating Group of the SCM Agreement. (India's first written
submission, paras. 136-139, 141, and 143)
659 India's first written submission, para. 138. (emphasis original)
660 India's first written submission, para. 137.
662 Canada's third-party submission, paras. 30 -33 (referring to Appellate Body Report, Brazil – Aircraft,
para. 139; Panel Report, India – Export Related Measures , para. 7.74); Costa Rica's third -party submission,
paras. 28-30 (referring to Panel Report, India – Export Related Measures, para. 7.74); United States' third-party
submission, para. 59. See also United States' third -party submission, paras. 61 and 64 -68 (referring to Panel
Report, India – Export Related Measures, paras. 7.50 and 7.70-7.73).
663 European Union's third -party submission, paras. 79 -80 (referring to Panel Report, India – Export
Related Measures, paras. 7.28-7.74).
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(a) developing country Members referred to in Annex VII.
(b) other developing country Members for a period of eight years from the
date of entry into force of the WTO Agreement, subject to compliance with
the provisions in paragraph 4.
7.310. Annex VII of the SCM Agreement, titled "Developing country Members referred to in
paragraph 2(a) of Article 27", provides, in relevant part:
The developing country Members not subject to the provisions of paragraph 1(a) of
Article 3 under the terms of paragraph 2(a) of Article 27 are:
…
(b) Each of the following developing countries which are Members of the
WTO shall be subject to the provisio ns which are applicable to other
developing country Members according to paragraph 2(b) of Article 27
when GNP per capita has reached $1,000 per annum: Bolivia, Cameroon,
Congo, Côte d'Ivoire, Dominican Republic, Egypt, Ghana, Guatemala,
Guyana, India, Ind onesia, Kenya, Morocco, Nicaragua, Nigeria, Pakistan,
Philippines, Senegal, Sri Lanka and Zimbabwe.664
7.311. Article 27.2(a) of the SCM Agreement provides that the prohibition of subsidies contingent
upon export performance under Article 3.1(a) does not apply to developing country Members
referred to in Annex VII , which includes India. In turn, Annex VII(b) provides that, when the GNP
per capita of a developing country Member listed in Annex VII has reached USD 1,000 per year,
such Member becomes subject to the tr eatment reserved for "other developing country Members"
under Article 27.2(b). Under Article 27.2(b), Article 3.1(a) shall not apply to "other developing
country Members for a period of eight years from the date of entry into force of the WTO Agreement".
7.312. The parties agree that India has reached a GNP per capita of USD 1,000 per year and that
India graduated from Annex VII(b) of the SCM Agreement as of 2017. 665 However, the parties
disagree whether the "period of eight years" referred to in Article 27.2(b) o f the SCM Agreement
begins from the date of India's graduation from Annex VII(b), as India argues, or from the date of
entry into force of the WTO Agreement, as Australia and Guatemala argue.
7.313. We note, first, that India's arguments are not based on the ordi nary meaning of
Article 27.2(b). Rather, India's interpretation is rooted in India's view of the context and negotiating
history of this provision.666 The text of Article 27.2(b) unequivocally provides for a transition "period
of eight years from the date of entry into force of the WTO Agreement". The WTO Agreement entered
into force on 1 January 1995. Therefore, it is clear from the text of Article 27.2(b) that "a period of
eight years from the date of entry into force of the WTO Agreement " within the meani ng of
Article 27.2(b) is the period from 1 January 1995 to 1 January 2003.667
7.314. We are not persuaded by India's argument that the language "shall be subject to" in
Annex VII(b) mandates that, when a Member graduates from Annex VII, it must receive "the same
treatment which other developing country Members have received, i.e. an 'eight year' phase out
period", which would only exist if the period commenced the date of its graduation from Annex VII.668

664 Footnote omitted.
665 We note that, pursuant to the 2001 Decision of the Ministerial Conference on "Implementation-Related
Issues and Concerns", the threshold of GNP per capita of USD 1,000 per year is met when Annex VII(b) Members
reach USD 1,000 in constant 1990 dollars for three consecutive years. (WTO, Ministerial Conference, Decision of
14 November 2001, WT/MIN(01)/17, para. 10.1) The WTO Secretariat annually publishes the gross national
product (GNP) per capita of the Annex VII(b) developing country Members using the three most recent years for
which data are available. According to the WTO Secretariat, India's GNP per capita exceeded USD 1,000 per year
for the periods 2013-2015 and 2014-2016. (Committee on Subsidies and Countervailing Measures, Annex VII(b)
of the Agreement on Subsidies and Countervailing Measures, G/SCM/110/Add.14 (11 July 2017); Committee on
Subsidies and Countervailing Measures, Annex VII(b) of the Agreement on Subsidies and Countervailing
Measures, G/SCM/110/Add.15 (20 April 2018))
666 India's first written submission, paras. 141-142.
667 Appellate Body Report, Brazil – Aircraft, para. 139.
668 India's first written submission, para. 139. (emphasis original)
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Annex VII(b) provides that Article 27.2(b) becomes applicabl e to certain developing country
Members " when [their] GNP per capita has reached $1,000 per annum ". The substance of the
cross-reference to Article 27.2(b) is determined by the content of that provision. This means that,
at the time of their graduation, Annex VII(b) Members become subject to the same provisions that
apply to other developing country Members under Article 27.2(b), i.e. the eight -year transition
period that started on 1 January 1995. We therefore consider that the text of Annex VII(b) does not
support India's view that Article 27.2(b) applies to Annex VII(b) Members with a modified starting
date for the eight-year transition period.
7.315. It may be that , if a developing country Member graduates from Annex VII(b) after
1 January 2003, the cross-reference to Article 27.2(b) would have no practical effect because the
eight-year transition period would have expired before the Member's graduation from the Annex.
However, we do not agree with India that this renders parts of the SCM Agreement "inutile" or
"amount[s] to an invalidation of the mandatory language in Annex VII(b)". 669 In our view, the
possibility that Members graduating from Annex VII(b) no longer benefit from the transition period
under Article 27.2(b) is inherent in the reference in Annex VII( b) to a time -limited provision.
Furthermore, Annex VII(b) Members that graduated before 1 January 2003 enjoyed a transition
period pursuant to Article 27.2(b).
7.316. India "submits that its interpretation is further supported by Articles 27.4 and 27.5 of the
SCM Agreement and that these provisions must be read harmoniously to give full effect to Article 27
of the SCM Agreement".670 In India's view, Article 27.4 "does not mention a specific date, but rather
appears to account for the possibility of different period s applying to [Members] graduating from
Annex VII at different times". 671 India further argues that "a strict interpretation" of Article 27.2
would mean that, under Article 27.5, an eight-year phase-out period would be available for products
that reached export competitiveness, while other export subsidies would have to be eliminated.672
7.317. Article 27.4 of the SCM Agreement stipulates that "[a]ny developing country Member
referred to in paragraph 2(b) shall phase out its export subsidies within the eight-year period ,
preferably in a progressive manner." 673 The first part of Article 27.4 is expressly linked to
Article 27.2(b) through the wording "[a]ny developing country Member referred to in paragraph
2(b)". Article 27.4 then refers to phasing out exp ort subsidies "within the eight-year period". The
use of the definite article "the" indicates that Article 27.4 refers to a specific or already identified
eight-year period. This period is defined in Article 27.2(b), to which Article 27.4 explicitly refers. We
therefore disagree with India that Article 27.4 envisages the possibility of different periods applying
to Members graduating from Annex VII at different times.
7.318. In turn, Article 27.5 of the SCM Agreement states:
A developing country Member which has reached export competitiveness in any given
product shall phase out its export subsidies for such product(s) over a period of two
years. However, for a developing country Member which is referred to in Annex VII and
which has reached export competitiveness in one or more products, export subsidies on
such products shall be gradually phased out over a period of eight years.
7.319. We disagree with India's view that Article 27.5 grants an extended exclusion from the
disciplines of Article 3.1(a). Article 27.5 requir es Members that otherwise benefit from special and
differential treatment to eliminate their export subsidies on products in which they have reached
export competitiveness, while maintaining their right to special and differential treatment due to
their de velopment status. In doing so, Article 27.5 treats Annex VII Members more favourably
compared to other developing country Members by giving the former eight years to phase out these
subsidies instead of the two-year period given to the latter. Clearly, therefore, the reference in Article
27.5 to Annex VII should be interpreted to mean that Annex VII Members benefit from an eight-year
phase-out period to eliminate export subsidies for products in which they have reached export
competitiveness, as long as the y continue to satisfy the requirements of Annex VII. A Member
graduating from Annex VII becomes subject to Article 27.2(b), in terms of the prohibition on export

669 India's first written submission, paras. 139-140.
670 India's first written submission, para. 141.
671 India's first written submission, para. 141.
672 India's first written submission, para. 141.
673 Emphasis added.
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subsidies generally, and to the first sentence of Article 27.5, in terms of the amount of time it has
to eliminate export subsidies for products in which it has reached export competitiveness. This
means that a Member graduating from Annex VII will be subject to Article 27.2, and will have either
two years or the time -period between its graduation and 1 January 2003, whichever is shorter, to
eliminate export subsidies for products in which it has reached export competitiveness. Therefore,
we do not consider that Article 27.5 grants an extended phase-out period compared to the one under
Article 27.2(b).
7.320. We note India's argument that not accepting its reading of Article 27.2(b), "when viewed in
light of the object and purpose of the SCM Agreement, would result in manifestly unreasonable
results where certain developing Members would be deprived of equi table treatment provided to
other developing country Members with respect to phasing out of export subsidies".674 We note that
the object and purpose of the SCM Agreement is to strengthen and improve GATT disciplines on the
use of both subsidies and countervailing measures, while, recognizing at the same time, the right of
Members to impose such measures under certain conditions. 675 As part of this balance, the
SCM Agreement grants special and differential treatment to developing country Members. In
particular, Article 27, found in Part VIII of the SCM Agreement, titled "Developing Country Members",
makes operational the principle of special and differential treatment.676 With this in mind, we fail to
see how our interpretation of Article 27.2(b) would run contrary to the object and purpose of the
SCM Agreement. Rather, in our view, this interpretation reflects the balance contained in the
SCM Agreement between prohibiting certain types of subsidies, on the one hand, and providing
special and differential treatment, in accordance with the relevant provisions of the SCM Agreement,
on the other hand.
7.321. Based on the above, we conclude that the terms of Article 27.2(b) of the SCM Agreement,
read in their context, and in light of the object and purpose of the SCM Agreement, indicate that the
eight-year transition period under Article 27.2(b) runs from 1 January 1995, i.e. the date of entry
into force of the WTO Agreement. 677 In light of the clear meaning of Article 27.2(b), we do not
consider it necessary to further examine India's arguments regarding supplementary means of
interpretation, such as the negotiating history of Article 27.678
7.322. It is undisputed that India has graduated from Annex VII(b) of the SCM Agreement. Our
interpretation of Article 27.2(b) leads us to conclude that the transition period set forth in
Article 27.2(b) expired on 1 January 2003, including for Members graduating from Annex VII(b). We
therefore find that Article 27 no longer excludes India from the application of Article 3.1(a) of the
SCM Agreement.
7.323. We now examine Australia's and Guatemala's claims under Article 3.1(a).
7.2.5.3 Whether India's subsidy schemes are inconsistent with Article 3.1(a) of the
SCM Agreement
7.324. As noted, Australia and Guatemala claim that India's Production Assistance, Buffer Sto ck,
and Marketing and Transportation Schemes constitute subsidies de jure contingent upon export
performance under Article 3.1(a) of the SCM Agreement. 679 In addition, Australia raises a claim

674 India's first written submission, para. 142.
675 Appellate Body Reports, US – Carbon Steel, paras. 73–74 and US – Softwood Lumber IV, para. 64.
676 Panel Report, Canada – Aircraft (Article 21.5 – Brazil), fn 120 to para. 5.135.
677 We note that India urged us not to rely on the interpretation of Article 27 developed by the panel in
India – Export Related Measures because the appeal in that dispute is currently pending before the Appellate
Body. (India's first written submission, par a. 144) Having examined the text of Article 27.2, in its context, and
in light of the object and purpose of the SCM Agreement, we have arrived at an understanding of that provision
which is consistent with the interpretation of the panel in India – Export Related Measures. (See Panel Report,
India – Export Related Measures , para. 7.69) Furthermore, contrary to what India suggests, the fact that the
panel report in that dispute is currently under appeal does not necessarily preclude future panels from relyin g
on that panel's interpretation of Article 27.2, if they find such interpretation persuasive.
678 Article 32 of the Vienna Convention on the Law of Treaties provides that "[r]ecourse may be had to
supplementary means of interpretation … in order to confirm the meaning resulting from the application of
Article 31, or to determine the meaning when the interpretation according to Article 31 (a) leaves the meaning
ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable."
679 Australia's first written submission, paras. 368-369 and 391; Guatemala's first written submission ,
para. 300.
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under Article 3.1(a) with respect to the DFIA Scheme. In substantiating their claims, Australia and
Guatemala refer to the arguments and evidence they submitted in support of their claims under
Articles 9.1(a) and (c) of the Agreement on Agriculture.680
7.325. We have found above that, through the Production Assistance, the Bu ffer Stock, the
Marketing and Transportation, and the DFIA Schemes, India grants to sugar mills direct subsidies
contingent on export performance within the meaning of Article 9.1(a) of the Agreement on
Agriculture.681 In reaching these findings, we concluded, inter alia, that the aforementioned Schemes
are (i) direct subsid ies, including payments in kind; (i i) provided by a government or its agency;
and (i ii) contingent on export performance. In examining whether the four Schemes are direct
subsidies, we assessed, in particular, the existence of "a financial contribution" and "benefit" within
the meaning of Article 1.1 of the SCM Agreement. Furthermore, in ascertaining whether the subsidies
under these four Schemes are contingent on export performance within the meaning of Article 9.1(a)
of the Agreement on Agriculture, we have concluded that the legal standard of export contingency
under Article 9.1(a) does not differ from that under Article 3.1(a) of the SCM Agreement.
7.326. We recall that, to demonstrate the existence of an export subsidy within the meaning of
Article 3.1(a) of the SCM Agreement, a Member must establish: (i) the existence of a subsidy within
the meaning of Article 1 of the SCM; and (ii) contingency of that subsidy upon export performance.682
We have concluded that the complainants have established the existence of these two elements in
the context of their claims under Article 9.1(a) of the Agreement on Agriculture. We therefore se e
no need to conduct an additional assessment of whether the Production Assistance, the Buffer Stock,
the Marketing and Transportation, and the DFIA Schemes are also inconsistent with Article 3.1(a) of
the SCM Agreement.683
7.327. Therefore, for the reasons set ou t in section 7.2.4.5 above, we find that the Production
Assistance, the Buffer Stock, the Marketing and Transportation, and the DFIA Schemes
constitute subsidies contingent upon export performance inconsistent with Article 3.1(a) of the
SCM Agreement. By maintaining such subsidies, India has also acted inconsistently with Article 3.2
of the SCM Agreement.
7.2.5.4 Conclusion under the SCM Agreement
7.328. In light of the above, we find that, under the Production Assistance, the Buffer Stock, the
Marketing and Transportation, and the DFIA Schemes, India has granted "subsidies contingent, in
law … upon export performance" inconsistent with Article 3.1(a) of the SCM Agre ement. By
maintaining such subsidies, India has also violated Article 3.2 of the SCM Agreement.
7.2.6 Recommendation under Article 4.7 of the SCM Agreement684
7.329. We have found that, under the Production Assistance Scheme, the Buffer Stock Scheme, the
Marketing and Transportation Scheme, and the DFIA Scheme, India provides subsidies contingent
upon export performance, inconsistently with Articles 3.1(a) and 3.2 of the SCM Agreement.
Therefore, pursuant to Article 4.7 of the SCM Agreement, we recommend that India wit hdraw such
subsidies without delay.
7.330. Article 4.7 further requires us to " specify in [our] recommendation the time-period within
which the measure must be withdrawn". We note, in this regard, that some panels called upon to
determine the time-period for the withdrawal of prohibited subsidies under Article 4.7 found a period

680 Australia's first written submission, paras. 391 -433; Guatemala's first written submission,
paras. 310-321.
681 See para. 7.304 above.
682 Panel Report, Canada – Aircraft Credits and Guarantees, para. 7.16
683 See Panel Report, US – Upland Cotton, para. 7.754.
684 This section concerns the Panel's findings in the disputes DS580 and DS581.
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of 90 days to be appropriate685 whereas others opted for longer periods, considering the nature of
the measures before them.686
7.331. It has been pointed out in past disputes that, in determining the time-period for withdrawal
"without delay" under Article 4.7, a panel should typically take into account the nature of the
measure(s) to be revoked or modified and the domestic procedures available for such revocation or
modification.687
7.332. In the present disputes, India's subsidies under the Production Assistance, the Buffer Stock,
and the Marketing and Transportation Schemes are granted by virtue of notifications issued by the
DFPD for specific sugar seasons. In turn, the MIEQ and the MAEQ orders are issued by the DFPD
pursuant to the authority granted to it under the Sugarcane Act and the Sugar (Control) Order. 688
As for the DFIA Scheme, it is set out in India's Foreign Trade Policy (FTP) 2015 -2020. The FTP is
adopted by "the Central Government" in the "exercise of powers conferred by Section 5 of the
Foreign Trade (Development and Regulation) Act, 1992".689 Thus, it appears that none of these four
Schemes require legislative action for their withdrawal. In principle, therefore, we do not consider
that a long period of time is needed for India to comply with our findings regarding these subsidies.
7.333. However, we also note that, throughout these proceedings, India has referred to the impact
of the COVID-19 pandemic on the functioning of its various governmental institutions.690 In our view,
the impact of the COVID-19 pandemic has to be taken into account in determining the time frame
for the withdrawal of the export subsidies at issue. On balance, in these disputes, we consider it
appropriate to grant India 120 days from the date of adoption of the Reports in DS580 and DS581
for the withdrawal of these subsidies.
7.334. Therefore, to the extent India continues to grant subsidies under the Production Assistance,
the Buffer Stock, the Marketing and Transportation, and the DFIA Schemes, we recommend that
India withdraw them within 120 days from the date of adoption of the Reports in DS580 and DS581.
7.3 Notifications691
7.335. Australia argues that India has violated its notification obligations under the Agreement on
Agriculture and the SCM Agreement. With regard to the Agreement on Agriculture, Australia alleges
three violations. First, it contends that India has failed to notify to the Committee on Agriculture its

685 E.g. Panel Reports, Korea – Commercial Vessels , para. 8.700; Canada – Aircraft Credits and
686 For example, in US – Upland Cotton, the panel recommended withdrawal of the measures either within
six months from adoption of the panel report, or by 1 July 2005 (which was a little less than ten months from
the date of circulation of the panel report), whichever was earlier. ( Panel Report, US – Upland Cotton ,
paras. 8.3(b) and 8.3(c) ) In US – FSC, the panel observed that withdrawal of the prohibited subsidy required
legislative action, and that the measures were part of the respondent's tax legislation, which was revised every
year with effect from the beginning of each fiscal year. On that basis, the panel considered that withdrawal would
be "without delay" if it took place no later than the start of th e fiscal year that would follow the completion of
the appeal process. This was a year from the expected circulation of the panel report, and about half a year from
the time at which the panel expected adoption of the report in case of an appeal . (Panel Report, US – FSC,
paras. 8.5-8.8) In India – Export Relates Measures , the panel took a measure -by-measure approach and
considered what action would be required to withdraw each of the subsidies it found to be inconsistent with
Articles 3.1(a) and 3.2 of the SCM Agreement. For measures that appeared to require amendments to legislative
acts of India's Parliament, the panel specified that withdrawal "without delay" would be withdrawal within 180
days from adoption of the panel report. (Panel Report, India – Export Related Measures, paras. 9.16 and 9.19)
687 These domestic procedures may include any extraordinary procedures that may be available within the
legal system of a WTO Member. (Appellate Body Report, Brazil – Taxation, para. 5.446)
688 See section 7.2.2 above.
689 Foreign Trade Policy 2015-2020, (Exhibit AUS-40), p. 6.
690 In particular, India noted that, to mitigate the effects of COVID-19, it imposed nation-wide lockdowns
and limited the number of government officials attending offices. (See e.g. India's comments on the Panel's
alternative proposal, 17 April 2020, p. 1; comments regarding the first substantive meeting and additio nal
working procedures, 28 October 2020, para. 11. See also India's opening statement at the first substantive
691 This section concerns the dispute DS580.
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annual domestic support to sugarcane producers subsequent to the 1995 -96 marketing year692, in
violation of Article 18.2 of the Agreement on Agriculture.693 Second, Australia argues that India has
acted inconsistently with Article 18.3 of the Agreement on Agriculture by failing to notify to the
Committee on Agriculture any new domestic support measure, or modification of an existing
measure, that India considers to be consistent with its obligations by virtue of being exempted from
its reduction commitments. 694 Third, Australia maintains that India's last notification to the
Committee on Agriculture of its export subsidies for sugar was in 2012, which covered the 2004-05
to 2009-10 marketing years, and that since then India has not made any new notification, thus
violating Article 18.2 of the Agreement on Agriculture. 695 With regard to the SCM Agreement,
Australia asserts that India has violated its notification obligations under Article 25 of that Agreement
by failing to notify its export subsidies for sugar.696 More specifically, Australia maintains that "India
has failed to notify its prohibited export subsidies, and is thus in breach of its notification obligations
under Articles 25.1 and 25.2 of the SCM Agreement". 697 Alternatively to its claims under the
Agreement on Agriculture and the SCM Agreement, Australia submits that India has failed to comply
with the notification obligation in Article XVI:1 of the GATT 1994.698
7.336. With respect to the claims under the Agreement on Agriculture, India does not dispute that
it last notified its domestic support to sugarcane producers in its 1995 -96 notification to the
Committee on Agriculture and that its last notification concerning export subsidies for sugar covered
the 2004-05 to 2009-10 marketing years. However, India arg ues that Article 18 of the Agreement
on Agriculture does not impose mandatory notification obligations on Members. Rather, India asserts
that this provision only vests the Committee on Agriculture with discretion to determine the conduct
of the review proc ess, based on notifications. In India's view, th e Committee on Agriculture uses
hortatory language in framing the notification requirements, which does not amount to a mandatory
obligation.699 In addition, India submits that the measures at issue are not of the kind that require
notification pursuant to the Agreement on Agriculture or the SCM Agreement. Specifically, India
maintains that the complainants have failed to demonstrate that the measures at issue which
purportedly have to be notified as domestic s upport measures meet the definition of domestic
support under the Agreement on Agriculture. 700 Similarly, with respect to the export subsidies
that India is allegedly required to notify under both the Agreement on Agriculture and the
SCM Agreement, India maintains that the complainants have failed to demonstrate that such
measures meet the definition of a "subsidy" within the meaning of those two Agreements. Thus,
India asserts, Australia has failed to establish that India was under a legal obligation to submit
notifications pursuant to Article 18 of the Agreement on Agriculture, Article 25 of the SCM
Agreement, and Article XVI of the GATT 1994.701

692 We note that in its notifications to the Committee on Agriculture (see e.g. G/AG/N/IND/1), India refers
to "marketing" years, as opposed to "financial" years. According to the Supporting Tables referenced in India's
Schedule, the financial year "corresponds basically to the marketing year ". (G/AG/AGST/IND, p. 4, para. 6)
(emphasis added) For ease of reference, we also use the term "marketing" year(s) in this section.
693 Australia's first written submission, para. 452.
694 In this respect, Australia asserts that India included certain buffer stock operations for sugar as a food
security measure in its notification for the 1996 -97 and 1997-98 marketing years, which India characterized as
exempt from reduction commitments under Annex 2 of the Agreement on Agriculture. In Australia's view, India
has failed to include such support in its subsequent notifications, inconsistently with Article 18.3 of the Agreement
on Agriculture. (Australia's first written submission, para. 453 (referring to G/AG/N/IND/2, DS:1, p. 3))
695 Australia's first written submission, para. 454 (referring to G/AG/N/IND/9, circulated by the Committee
on Agriculture on 30 July 2012).
696 Australia's first written submission, para s. 456-458. Australia asserts that, pursuant to Article 2.3 of
the SCM Agreement, subsidies prohibited by Article 3 of the SCM Agr eement are deemed to be "specific" within
the meaning of Article 2 of the SCM Agreement. In Australia's view, since India grants such prohibited subsidies,
it is obliged to notify them under Article 25 of the SCM Agreement. (Ibid. paras. 456-457)
697 Australia's response to Panel question No. 44(a), para. 139. Australia added that "[b]y not submitting
notifications, India has also, in effect, violated the requirements concerning the content of notifications set out
in Article 25.3 and 25.4." (Ibid.)
698 Australia's first written submission, para. 459.
699 India's first written submission, paras. 158-159. India relies on the language used in document G/AG/2,
adopted by the Committee on Agriculture at its meeting on 8 June 1995. (Committee on Agriculture, Notification
Requirements and Formats, G/AG/2 ("G/AG/2"))
700 India asserts that the Committee on Agriculture "recommends [sic.] Members that 'where no support
exists, a statement to this effect should be made '." (India's first written submission, para. 159 (referring to
G/AG/2, p. 11, (ii))) However, India adds, "this recommendation again, uses hortatory language making clear
that it is suggestive in nature and not a binding obligation." (Ibid.)
701 India's first written submission, para. 157.
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7.337. We proceed with our analysis by addressing, in turn, Australia's claims under: (i) Article 18.2
of the Agreement on Agriculture; (ii) Article 18.3 of the Agreement on Agriculture; and (iii) Article 25
of the SCM Agreement. Thereafter, we proceed to address Australia's alternative claims under
Article XVI:1 of the GATT 1994, as appropriate.
7.338. Regarding Australia's claim under Article 18.2 of the Agreement on Agriculture, we note that
the parties contest whether the Agreement on Agriculture, including Article 18.2, imposes any
notification obligation on Members.702 Hence, we must first examine whether Article 18.2 imposes a
notification obligation before we examine whether India has violated any such obligation. The parties'
arguments in this regard pertain to Article 18 of the Agreement on Agriculture, read in light of
document G/AG/2 adopted by the Committee on Agriculture regarding notifications. We examine
Article 18 and G/AG/2 in order to determine whether they contain an obligation to notify the relevant
measures.
7.339. Article 18 of the Agreement on Agriculture provides, in relevant parts:
1. Progress in the implementation of commitments negotiated under the Uruguay
Round reform programme shall be reviewed by the Committee on Agriculture.
2. The review process shall be undertaken on the basis of notifications submitted by
Members in relation to such matters and at such intervals as shall be determined, as
well as on the basis of such documentation as the Secretariat may be requested to
prepare in order to facilitate the review process.
3. In addition to the notifications to be submitted under paragraph 2, any new
domestic support measure, or modification of an existing measure, for which exemption
from reduction is claimed shall be notified promptly. This notification shall contain
details of the new or modified measure and its conformity with the agreed criteria as
set out either in Article 6 or in Annex 2.
7.340. We observe that Article 17 of the Agreement on Agriculture establishes the Committee on
Agriculture, and paragraph 1 of its Article 18 mandates that Committee to oversee Members'
implementation of their commitments undertaken in the context of the Uruguay Round reform
programme. While the text of paragraph 2 of Article 18 might not be explicit regarding a notification
obligation, it conveys a clear expectation that such notifications will be made, and we do not agree
with India's view that this provision entails no obligation to notify . In this regard, we find it
appropriate to interpret this paragraph in light of its immediate context found in the other paragraphs
of the same Article. Paragraph 1 points out that progress in the implementation of commitments
"shall be reviewed" by the Committee. Paragraph 2 provides that the review process "shall be
undertaken" on the basis of notifications submitted by Members. This demonstrates that the duty of
the Committee on Agriculture to conduct the review process is essentially based on the notifications
to be submitted by Members . Thus, paragraphs 1 and 2 of Article 18, read together, indicat e that
Members are expected to notify the implementation of their commitments.
7.341. This interpretation finds strong support in paragraph 3. This paragraph states that "[i]n
addition to the notifications to be submitted under paragraph 2", which again reinforc es the
expectation that Members will make notifications, "any new domestic support measure, or
modification of an existing measure, for which exemption from reduction is claimed shall be notified
promptly". Clearly, the term "shall" in paragraph 3 indicates that Members must also notify any new
or modified measures for which an exemption from reduction commitment is claimed. We see no
reason why the drafters would oblige Members to notify new measures and modifications to existing
measures for which exempti ons are claimed, but not require the notification of non -exempt
measures. We are therefore not persuaded by India's interpretation of these provisions.
7.342. Furthermore, we consider India's interpretation difficult to reconcile with the main purpose
of Article 18, i.e. to enable the Committee on Agriculture to review Members' implementation of

702 In this regard, we also note Canada's third-party arguments relating to Australia's claims under the
Agreement on Agriculture, stating, inter alia , that " Article 18 of the [Agreement on Agriculture] imposes a
mandatory obligation on WTO Members to notify their measures; and [] Members must in good faith notify all
domestic support in favour of agricultural producers, including market price support, under Article 18 of the
[Agreement on Agriculture]."(Canada's third-party submission, para. 42)
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their commitments and thereby to ensure transparency. If we were to accept India's interpretation,
it would mean that the provision obliging the Committee to conduct a no tification-based review
would, at the same time, restrict the Committee's ability to discharge that responsibility, by not
requiring Members to submit such notifications. In sum, we find that Article 18.2 of the Agreement
on Agriculture includes an obligation for Members to notify all their domestic support measures and
agricultural export subsidies to the Committee on Agriculture.703
7.343. We now turn to the parties' arguments regarding document G/AG/2.704 Australia asserts that
in addition to the obligatio ns under Article 18 of the Agreement on Agriculture, document G/AG/2
sets out the notifications' requirements and formats.705 Australia adds that the said document is not
a treaty-level instrument, and "[i]t is immaterial, and unsurprising, that the document uses hortatory
language".706 In India's view, since there is no notification obligation under Article 18, the hortatory
language of document G/AG/2 itself does not amount to such an obligation.707
7.344. We recall that Australia brings its claims under Article 18 of the Agreement on Agriculture,
not under document G/AG/2.708 We have interpreted Article 18 as containing an obligation to notify,
inter alia, domestic support measures and agricultural export subsidies. We observe that document
G/AG/2 contains hortatory language, stating that notifications "should be made"709 within specified
timeframes and frequencies with respect to the relevant implementation periods . We also observe
that it clarifies the notification "requirements and formats" in each policy area .710 For instance, it
sets out the "matters" that should be notified, and the "intervals" at which notifications should be
submitted, in accordance with paragraph 2 of Article 18. It also confirms that notifications cover,
inter alia, the domestic support measures and export subsidies provided by Members.711
7.345. Reading Article 18 of the Agreement on Agriculture together with document G/AG/2 confirms
that Article 18.2 imposes an obligation on Members, including India, to notify their domestic support
and export sub sidies. Document G/AG/2 clarifies the manner in which Members are expected to
comply with their notification obligations under Article 18.2. We do not see anything in document
G/AG/2 that contradict s our interpretation of Article 18 .2 as containing an obligation to submit
notifications to the Committee on Agriculture.
7.346. Turning to the issue of whether India has acted inconsistently with Article 18.2, we recall
that we have found that India maintains dom estic support to sugarcane producers and export
subsidies for sugar. 712 There is no dispute among the parties as to when India last submitted its
notifications to the Committee on Agriculture. Based on our assessment of the evidence on record713,
we observe that, with respect to its domestic support measures, India's last notification of domestic
support to sugarcane producers concerned the 1995-96 marketing year. We recall our finding that

703 We note that, in the Uruguay Round, Memb ers undertook certain commitments in the areas of, inter
alia, agricultural domestic support and export subsidies. (See e.g. Agreement on Agriculture, preamble,
Articles 6-10) Thus, to review the progress in the implementation of such commitments, notifications relating to
both areas must be submitted to the Committee on Agriculture.
704 Document G/AG/2 was adopted by the Committee on Agriculture at its meeting on 8 June 1995, and
is accompanied by an Addendum, G/AG/2/Add.1, adopted on 16 October 1995.
705 Australia's first written submission, para. 439.
706 Australia's response to Panel question No. 44(b), para. 140.
707 India's first written submission, paras. 158-159.
708 Australia's first written submission, para. 468; response to Panel question No. 44(b), para. 140.
709 See e.g. G/AG/2, pp. 11 and 24.
710 G/AG/2, p. 1.
711 G/AG/2, pp. 11 and 24. We also observe that, regarding domestic support, there are two distinct types
of notifications, i.e. those relating to calculation and annual reporting of the Current Total AMS , which are to be
submitted annually, and those relating to the ad-hoc notification of new or modified domestic support measures
for which exemption from reducti on is claimed under Article 6 or Annex 2 . (G/AG/2, p. 11) Regarding export
subsidies, subject to certain conditions, the deadline to submit notifications for Members with no export subsidy
reduction commitments in Part IV of their Schedules, such as India, is no later than 30 days following the end of
the year in question. (G/AG/2, p. 24)
712 We have established that: (i) India maintains market price support through the FRP and SAPs, as well
as at least one non-exempt direct payment, within the meaning of the Agreement on Agriculture (see paras. 7.66
and 7.90 above); (ii) India grants direct subsidies contingent on export performance within the meaning of the
Agreement on Agriculture (see para. 7.304 above); and (iii) India grants export subsidies that are inconsistent
with its obligations under the SCM Agreement (see para. 7.328 above).
713 In seeking to substantiate its assertions relating to India's alleged violation, Australia refers to a
number of Ind ia's notifications, submitted to the Committee on Agriculture. (See e.g. Australia's first written
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India maintained domestic support to sugarcane producers for the 2014 -15 to 2018 -19 sugar
seasons ( which we understand correspond to the 2015 -16 to 2019 -20 marketing years). With
respect to its export subsidies, we note that India last notified its export subsidies for sugar in its
notification to the Committee on Agriculture, circulated on 30 July 2012, which covered the 2004-05
to 2009–10 marketing years.714 In this connection, we also recall our findings that India maintained
export subsidies for sugar during certain marketing years following the periods subject to its las t
notification.715
7.347. We therefore conclude that India has failed to notify its domestic support to sugarcane
producers after the 1995-96 marketing year, inconsistently with Article 18.2 of the Agreement on
Agriculture. We also conclude that India has failed to submit notifications of its export subsidies for
sugar after the 2009-10 marketing year, inconsistently with Article 18.2 of the Agreement.
7.348. We now turn to examine Australia's allegation that India has also violated the obligation laid
down in Article 18.3 of the Agreement on Agriculture. In this regard, Australia contends that India
notified certain buffer stock operations for sugar, characterized by India as exempt by virtue of
Annex 2 of the Agreement on Agriculture, in its notification for the 1996-97 and 1997-98 marketing
years.716 In Australia's view, by failing to include such support in its subsequent notifications, India
has violated Article 18.3 of the Agreement on Agriculture. We note, however, that Australia has not
submitted evidence demonstrating that such support was maintained by India after the 1996-97 and
1997-98 marketing years. We therefore reject Australia's claim that India has acted inconsistently
with Article 18.3.
7.349. We now proceed to address Australia's claims under the SCM Agreement. We begin by noting
that Article 24 of the SCM Agreement establishes the Committee on Subsidies and Countervailing
Measures ("SCM Committee"), which receives Members' subsidy notifications. The relevant parts of
Article 25 read:
1. Members agree that, without prejudice to the provisions of paragraph 1 of
Article XVI of GATT 1994, their notifications of subsidies shall be submitted not later
than 30 June of each year and shall conform to the provisions of paragraphs 2
through 6.
2. Members shall notify any subsidy as defined in paragraph 1 of Article 1, which is
specific within the meaning of Article 2, granted or maintained within their territories.
7.350. We observe that paragraph 1 specifies the intervals and dates of subsidy notifications
whereas paragraph 2 clarifies that any subsidy that is specific has to be notified. We also observe
that the notification obligation set out under Article 25 of the SCM Agreement serves a transparency
objective, and that, pursuant to Article 25.7, "notification of a measure does not prejudge either its
legal status under GATT 1994 and this Agreement, the effects under this Ag reement, or the nature
of the measure itself."717
7.351. We note that, in contrast to its position regarding Article 18 of the Agreement on Agriculture,
India does not dispute the mandatory nature of the notification obligation under Article 25 of the
SCM Agreement.718 Rather, as noted above, India's sole argument is that the complainants have
failed to establish that India provides export subsidies within the meaning of the Agreement on
Agriculture and the SCM Agreement, and therefore Australia has failed to demon strate that a
notification obligation exists.
7.352. Turning now to the facts concerning this claim, we note Australia's argument that India has
failed to notify its export subsidies for sugar since 2009 -10.719 We observe, however, that the

714 G/AG/N/IND/9.
715 See paras. 7.304 and 7.328 above.
717 The Appellate Body also highlighted this aspect in Brazil – Aircraft, by stating that "Article 25 aims to
promote transparency by requiring Members to notify their subsidies, without prejudging the legal status of those
subsidies". (Appellate Body Report, Brazil – Aircraft, para. 149)
718 India's first written submission, para. 157.
719 Australia's first written submission, para. 458.
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notifications circulated to date by the SCM Committee show that India has never notified a subsidy
for sugar under the SCM Agreement. We also note that India has not argued otherwise.
7.353. Above, we have found that, under the Production Assistance, the Buffer Stock, the Marketing
and Transportation, and the DFIA Schemes, India grants subsidies contingent upon export
performance within the meaning of Article 3.1(a) of the SCM Agreement.720 Moreover, we recall that,
under the said Schemes, India grants subsidies only to one part of its agricultural sector - the
producers of sugar. 721 In this regard, we also note that, according to Article 2.3 of the
SCM Agreement, subsidies falling under Article 3 are deemed to be specific. It follows that, by not
notifying these export subsidies to the SCM Committee, India has acted inconsistently with its
obligations under Articles 25.1 and 25.2 of the SCM Agreement.
7.354. In light of the above, we conclude that India has violated its obligation under Article 18.2
of the Agreement on Agriculture by failing to notify to the Committee on Agriculture its domestic
support to sugarcane producers subsequent to the 1995 -96 marketing year, as well as its export
subsidies for sugar subsequent to the 2009-10 marketing year. We also find that by failing to notify
to the SCM Committee its export subsidies for sugar under the Production Assistance, the Buffer
Stock, the Marketing and Transportation, and the DFIA Schemes, India has violated its obligations
under Articles 25.1 and 25.2 of the SCM Agreement.722
8 CONCLUSIONS AND RECOMMENDATIONS
8.1 Complaint by Brazil (DS579)
8.1. With respect to Brazil's claims regarding India's domestic support to sugarcane producers, we
find that, for five consecutive sugar seasons, from 2014-15 to 2018-19, India provided non-exempt
product-specific domestic support to sugarcane producers in excess of the permitted level of 10%
of the total value of sugarcane production. Therefore, we find that India is acting inconsistently with
its obligations under Article 7.2(b) of the Agreement on Agriculture.
8.2. With respect to Brazil's claims regarding India's export subsidies pertaining to sugar or
sugarcane, we find that India's subsidies under the Production Assistance, the Buffer Stock, and the
Marketing and Transportation Schemes are contingent on export performance within the meaning
of Article 9.1(a) of the Agreement on Agriculture. Since India did not make export subsidy reduction
commitments with respect to sugar in its Schedule, we find that India's subsidies contingent on
export performance within the meaning of Article 9.1(a) are inconsistent with Articles 3.3 and 8 of
the Agreement on Agriculture.
8.3. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We conclude that, to the extent that the m easures at issue are
inconsistent with certain provisions of the Agreement on Agriculture, they have nullified or impaired
benefits accruing to Brazil under that Agreement.
8.4. Pursuant to Article 19.1 of the DSU, we recommend that India bring its WTO -inconsistent
measures into conformity with its obligations under the Agreement on Agriculture.
8.2 Complaint by Australia (DS580)
8.5. With respect to Australia's claims regarding India's domestic support to sugarcane producers
we find that , f or five consecutive sugar seas ons, from 2014 -15 to 2018 -19, India provided
non-exempt product-specific domestic support to sugarcane producers in excess of the permitted

720 See paras. 7.327-7.328 above.
721 For a detailed factual description of these four schemes, see section 7.2.2 above.
722 In view of our finding that, by failing to notify its export subsidies for sugar, India has violated
Articles 25.1 and 25.2 of the SCM Agreement, we do not consider it necessary to address Australia's assertion
that India has also, in effect , violated Articles 25.3 and 25.4 of that Agreement. (See fn 697 to para. 7.335
above) Moreover, in light of our findings under the Agreement on Agriculture and the SCM Agreement, we do
not consider it necessary to address Australia's alternative claims under Article XVI:1 of the GATT 1994.
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level of 10% of the total value of sugarcane production. Therefore, we find that India is acting
inconsistently with its obligations under Article 7.2(b) of the Agreement on Agriculture.
8.6. With respect to Australia's claims regarding India's export subsidies pertaining to sugar or
sugarcane, we conclude that:
a. India's subsidies under the Production Assistance, the Buffer Stock, the Marketing and
Transportation, and the DFIA Schemes are contingent on export performance within the
meaning of Article 9.1(a) of the Agreement on Agriculture. Since India did not make
export subsidy reduction commitments with respect to sugar in its Schedule, India's
subsidies contingent on export performance within the meaning of Article 9.1(a) are
inconsistent with Articles 3.3 and 8 of the Agreement on Agriculture;
b. Under the Production Assistance, the Buffer Stock, the Marketing and Transportat ion,
and the DFIA Schemes, India provides subsidies contingent upon export performance,
inconsistently with Articles 3.1(a) and 3.2 of the SCM Agreement.
8.7. With respect to Australia's claims regarding India's notification obligations, we conclude that:
a. By failing to notify to the Committee on Agriculture its domestic support to sugarcane
producers subsequent to the 1995 -96 marketing year, as well as its export subsidies
for sugar subsequent to the 2009 -10 marketing year , India has acted inconsistently
with its obligation under Article 18.2 of the Agreement on Agriculture;
b. Australia has failed to demonstrate that India maintained certain buffer stock operations
for sugar after the 1996-97 and 1997-98 marketing years, which India was allegedly
required to not ify under Article 18.3 of the Agreement on Agriculture after those
marketing years. We therefore reject Australia's claim that India has acted
inconsistently with Article 18.3 of the Agreement on Agriculture;
c. By failing to notify to the SCM Committee its export subsidies for sugar under the
Production Assistance, the Buffer Stock, the Marketing and Transportation, and the DFIA
Schemes, India has acted inconsistently with its obligations under Articles 25.1 and 25.2
of the SCM Agreement.
8.8. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We conclude that , to the extent that the measures at issue are
inconsistent with certain provisions of the Agreement on Agriculture and the SCM Agreement, they
have nullified or impaired benefits accruing to Australia under those Agreements.
8.9. Pursuant to Article 19.1 of th e DSU, we recommend that India bring its WTO -inconsistent
measures into conformity with its obligations under the Agreement on Agriculture and the
SCM Agreement.
8.10. Furthermore, with respect to India's prohibited subsidies under Article 3.1(a) of the
SCM Agreement, we recall Australia's request that the Panel recommend, in accordance with
Article 4.7 of the SCM Agreement, that India withdraw those subsidies without delay within a
time-period specified by the Panel.
8.11. In light of our conclusions above, and consistent with Article 4.7 of the SCM Agreement , we
recommend that India withdraw its prohibited subsidies under the Production Assistance, the Buffer
Stock, the Marketing and Transportation, and the DFIA Schemes within 120 days from the adoption
of our Report.
8.3 Complaint by Guatemala (DS581)
8.12. With respect to Guatemala's claims regarding India's domestic support to sugarcane
producers we find that, for five consecutive sugar seasons, from 2014-15 to 2018-19, India provided
non-exempt product-specific domestic support to sugarcane producers in excess of the permitted
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level of 10% of the total value of sugarcane production. Therefore, we find that India is acting
inconsistently with its obligations under Article 7.2(b) of the Agreement on Agriculture.
8.13. With respect to Guatemala's claims regarding India's export subsidies pertaining to sugar or
sugarcane, we conclude that:
a. India's subsidies under the Production Assistance, the Buffer Stock, and the Marketing
and Transportation Schemes are contingent on export performance within the meaning
of Article 9.1(a) of the Agreement on Agriculture. Since India did not make export
subsidy reduction commitments with respect to sugar in its Schedule, India's subsidies
contingent on export performance within the meaning of Article 9.1(a) are inconsistent
with Articles 3.3 and 8 of the Agreement on Agriculture;
b. Having found that India's Production Assistance, Buffer Stock, and Marketing and
Transportation Schemes are inconsistent with Article 9.1(a) of the Agreement on
Agriculture, we do not consider it necessary to address Guatemala's claim under
Article 9.1(c) of the Agreement on Agriculture regarding the same Schemes;
c. Under the Production Assistance, the Buffer Stock, and the Marketing and
Transportation Schemes, India provides subsidies contingent upon export performance,
inconsistently with Articles 3.1(a) and 3.2 of the SCM Agreement.
8.14. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We conclude that, to the extent that the measures at issue are
inconsistent with certain provisions of the Agreement on Agriculture and the SCM Agreement, they
have nullified or impaired benefits accruing to Guatemala under those Agreements.
8.15. Pursuant to Article 19.1 of the DSU, we recommend that India bring its WTO -inconsistent
measures into conformity with its obligations under the Agreement on Agriculture and the
SCM Agreement.
8.16. Furthermore, with respect to India's prohibited subsidies under Article 3.1(a) of the
SCM Agreement, we recall Guatemala's request that the Panel recommend, i n accordance with
Article 4.7 of the SCM Agreement, that India withdraw those subsidies without delay within a
time-period specified by the Panel.
8.17. In light of our conclusions above, and c onsistent with Article 4.7 of the SCM Agreement , we
recommend that India withdraw its prohibited subsidies under the Production Assistance, the Buffer
Stock, and the Marketing and Transportation Schemes within 120 days from the adoption of our
Report.