The European Parliament demands a review of the trade deal with India due to excessive subsidies on sugar, which have led to anti-competitive behavior.

The European Parliament has condemned the "excessive" subsidies provided by India for sugar production and has decided to review the trade deal between the EU and India.

According to the latest resolution, the European sugar industry views the practice in India of artificially lowering sugar prices as anti-competitive and demands a review of the trade deal. As a result, some sugar producers have already begun to call for a direct ban on Indian sugar imports into the EU market.

In normal market conditions, sugar from the EU could compete with Indian sugar. However, government support measures for the Indian sugar industry significantly distort competition, reports Josh Hartland, Deputy Director-General of the European Committee of Sugar Manufacturers (CEFS). A recent WTO ruling confirmed what the European sugar sector has been warning about for many years: the Indian sugar industry receives strong subsidies for production and export, which have catastrophic consequences for the global market.

The international organization states that India has violated the WTO agreement on agriculture by providing excessive subsidies to sugarcane producers for this particular product between 2014 and 2019.

"We have long been calling for the abolition of trade-distorting subsidies and strongly oppose market access under unfair conditions," says Marie-Christine Ribera, Director-General of the European Sugar Association. "We urge the European Commission to take into account the position of the European Parliament in negotiations with India and ensure that Indian sugar will no longer enter the EU market until anti-competitive subsidies are eliminated."

The stern stance of European sugar producers follows a series of crises, including in sugar beet cultivation. They hope that raising sugar prices (if they can abstain from cheap Indian sugar) in the EU market next season will help restore profitability, as noted by Mark Servera.

In addition, political motives have influenced the decision-making, according to representatives of the European industry. Furthermore, India receives fertilizers from Russia at preferential prices.

It should be noted that in May 2021, India imposed restrictions on sugar exports, so Indian producers are uncertain about how much they will be able to sell in international markets next season.

Regarding situations where local sugar producers block sugar imports, an example can be seen in the Philippines. Recently, the Sugar Industry Federation (UNIFED) emphasized that imported sugar threatens the livelihoods of sugarcane farmers as sugar prices on the domestic market decrease while the costs of cultivating sugarcane increase due to expensive fertilizers. As a result, UNIFED has blocked sugar imports for the last five months. By the end of June, the sugar situation in the country became critical due to unfavorable weather conditions such as Typhoon Odette and La Niña hurricanes, leading to a shortage of supply and uncontrollably high prices.