India says confident WTO will understand its food security concerns

Wednesday, 6 August 2014 00:01 - - {{hitsCtrl.values.hits}}

Reuters: India is confident that it will be able to persuade members of the 160-strong World Trade Organisation to understand its concerns over food security which derailed a global trade deal last week, the country’s trade minister said. Nirmala Sitharaman told parliament that the Bali trade accord, an agreement reached on the Indonesian tourist island last year, should be concluded as a package, linking India’s ratification of a trade facilitation treaty to movement on a parallel treaty on stockpiling of food. “I am confident that India will be able to persuade the WTO membership to appreciate the sensitivities of India and other developing countries and see their way to take this issue forward in a positive spirit,” she said amid thumping of desks by lawmakers. India’s new national government vetoed the adoption of a treaty to simplify, standardise and streamline the rules for shipping goods across borders, having previously agreed to its terms at the ministerial conference in Bali last December. After drawing widespread condemnation, India has since said it is ready to sign the global trade deal as early as next month if other World Trade Organisation members agree to its demand for concessions on food subsidies, estimated at $ 12 billion a year. “India is not standing in way of implementation of Trade Facilitation but seeking equal level of commitment and progress in working on the issue of public stockholding,” Sitharaman said. “A permanent solution on food security is a must for us and we cannot wait endlessly in state of uncertainty while WTO engages in an academic debate on subject of food security,” she said. India fears that once it agrees to trade facilitation – largely seen to help advanced nations – it would have lost the bargaining chip on the subsidy issue. RBI keeps repo rate unchanged, cuts SLR for banks Reuters: The RBI kept its key policy repo rate unchanged on Tuesday as widely expected, but warned about inflationary risks should a shortfall in monsoon rains spark a surge in food prices. The Reserve Bank of India also announced measures to free up resources for banks to lend, a priority for Prime Minister Narendra Modi’s government as it seeks to encourage investment in order to put momentum back in sluggish economic growth. The RBI lowered banks’ minimum bond holding requirements, known as the statutory liquidity ratio (SLR), by half a percentage point to 22% to free up more money for lending, effective from 9 August. The RBI also cut the ceiling on debt that must be held-to-maturity (HTM) by half a percentage point to 24%. “With some continuing uncertainty about the path of the monsoon, it would be premature to conclude that future food inflation, and its spill-over to broader inflation, can be discounted,” the RBI said in a statement.