The United States has agreed to support India’s stand to extend its food subsidy program (the world’s largest) until a permanent solution is reached. In July, India blocked part of the World Trade Organization deal because it was unclear if its program could continue beyond a 2017 deadline, and this in turn, had stalled the implementation of a landmark Trade Facilitation Agreement spelled out at the WTO’s ministerial conference in Bali last December.
“India and the U.S. have successfully resolved their differences relating to the issue of public stock holding for food security purposes in the WTO in a manner that addresses our concerns,” Indian Trade Minister Nirmala Sitharaman told reporters in New Delhi. “This will end the impasse at the WTO and also open the way for implementation of the trade facilitation agreement,” she said.
The trade body estimates that the agreement would stimulate the world economy by $1 trillion. The India-U.S. agreement will reduce the cost of trade by about 10 percent for developed countries and 14 percent for developing countries, according to U.S. Trade Representative Michael Froman. The Bali agreement would shield India’s stockpiles for food security from a legal challenge even if the program distorts trade and exceeds India’s agreed subsidy limits, according to the WTO. India last year allocated $20 billion for its public food distribution system to help more than two-thirds of its 1.2 billion people who eat less than the minimum target set by the government. The Trade Facilitation Agreement contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.
Last updated: December 26th, 2025
