The Indian government is threatening to block the implementation of a deal struck in Bali last year by trade ministers from around the world, in a move that could halt efforts to revive multilateral trade talks and further damage the reputation of the World Trade Organisation.
The agreement by the WTO's 160 members last December saw them commit to streamline the flow of goods through borders worldwide. More importantly, it marked the first time in the body's two-decade history that ministers concluded a deal and came as key WTO members are prioritizing regional negotiations instead.
The "trade facilitation agreement" faces its first implementation deadline on July 31 when WTO members, who make decisions by consensus, must approve a one-paragraph "accession protocol".
But in an interview with the Financial Times, Nirmala Sitharaman, India's commerce minister, said New Delhi would not back that protocol because it was unhappy with the progress of talks on food security that ministers also committed to in Bali. Those, she said, had been cast aside.
India wants immediate and intensive negotiations over the unresolved issue of its vast grain stockpiling and food subsidy programs, she said. It did not want to wait until 2017, the deadline set in Bali for a "permanent solution" on how to treat its members' food security programs.
India's grain stockpiles are a highly sensitive issue in the country of 1.2 billion people, where more than 40 per cent of children under five years old are malnourished. How to treat such schemes under WTO rules remains an area of contention that ministers in Bali agreed to tackle by 2017.
India gives farmers a minimum support price for cultivating wheat and other cereals, then distributes the grain to the poor at a subsidized price. Some countries say such schemes distort global markets, while others say they are necessary in a world of rising food prices.
"You've given yourself until 2017, but that doesn't mean you have to wait to start," Ms Sitharaman told the FT. "We want you to start immediately . . . We want some very quick, substantive movement on this."
India stunned fellow WTO members this month when it unexpectedly announced it would not support proceeding with the trade facilitation deal. But it has been unclear since, senior officials in Geneva say, exactly what India wants in return for its vote.