Australian canegrowers have won a long-running legal battle against Indian sugar subsidies, after the World Trade Organization (WTO) ruled in Australia's favour overnight.
A WTO panel found India had export subsidies in place that were prohibited under trading rules and recommended their removal.
Chair of the Australian Canegrowers, Paul Schembri said it was an encouraging decision not only for Australian cane growers, but any sugar producers around the world that do not receive subsidies.
"But certainly it's encouraging news."
It has been three years since Australia, along with the Brazilian and Guatemalan governments lodged a complaint with the WTO, accusing India of distorting the global sugar price through subsidies to its farmers.
Australian growers alleged the subsidies caused a glut in the international market, leading to a significant drop in global prices.
"In the past three or four years, the world sugar price has been at or below the cost of production, and that has exacted enormous economic damage to the Australian sugar industry."
Canegrowers had hoped a ruling would come earlier this year, but the process had been hampered by COVID-19.
In a statement, Canegrowers and the Australian Sugar Milling Council called upon the Indian government to comply with the findings of the WTO's panel.
It is not the first time the WTO has ruled in Australia's favour on sugar subsidies: the European Union's supports were declared illegal in 2004, which led to an immediate increase in the world sugar price.
What's next?
The victory could be short lived, as India has already indicated they're looking to appeal the decision through a defunct process.
Currently, the Appellate body that responds to appeals isn't functioning, due to internal disputes.
Federal Trade Minister Dan Tehan said this highlights the need for WTO reforms.
"My hope is India will look very seriously at these findings and will seek to put the changes in place."
The win could have ramifications for Australia's other disputes, currently before the international court.
In March, the Australian government announced it would refer China to a WTO dispute panel for breaching international trading rules by imposing tariffs on barley; and in October this year, the WTO agreed to examine China's tariffs on Australian wine.
But Minister Tehan said he's hopeful the issues surrounding the Appellate body won't affect the dispute with China.
"Well one of the promising things is both Australia and China have signed up to the alternative mechanism to be able to appeal disputes," Minister Tehan said.
