India's opposition to a global trade deal is akin to the country "holding a gun to its own head," and it risks derailing New Delhi's efforts to create an open-for-business image, analysts said.
A World Trade Organization (WTO) deal to standardize custom rules failed to go through on Thursday due to India's demands for concessions on food subsides.
Mumbai is currently permitted to run food stockpiling programs and subsidies until 2017 thanks to a clause agreed upon in the December meeting of WTO members in Bali. But India is now demanding that the WTO start negotiations on the framework for its subsidized programs this year, rather than waiting for the 2017 deadline.
"India seems to be holding a gun to its own head here. The WTO facilitation agreed to in December is very much tied in to the food stockholding deal that India reached in the same meeting," said Jake Colvin, vice-president of global trade issues at the National Foreign Trade Council. "If the trade facilitation deal falls apart, it's going to put a lot of pressure on this public stockholding deal with India."