United States and India Reach Agreement on Trade Facilitation

The United States and India were able to come to agreement on the Trade Facilitation Agreement (TFA), an outcome of the World Trade Organization (WTO) Ministerial Meeting last year in Bali, Indonesia. Nirmala Sitharaman, Minister of Commerce and Industry, announced that India and the United States have successfully resolved their differences on the public stock holding issue and food security. 

Though the terms of the compromise were not disclosed, it is understood that the United States will support India’s proposal to the WTO General Council. India will likely argue for a longer peace clause in its proposal. Under the peace clause, WTO Members are not subject to dispute settlement for exceeding the subsidy limits. Under the current agreement the peace clause would be adhered to for four years until a new agreement can be reached. 

A statement from the United States Trade Representative, Michael Froman, said that Delhi and Washington have agreed that India's food security programs would not be challenged under WTO rules "until a permanent solution regarding this issue has been agreed and adopted.”


The TFA was the first truly Member-driven WTO agreement in many years.This agreement paves the way for full implementation of the TFA, making trade easier, faster and less costly by introducing more transparent customs procedures and decision-making, and reducing barriers. In addition, the TFA provides for technical and other assistance to developing countries to improve customs procedures.  

Even during the negotiation of the TFA India raised concerns over its public food stocktaking program and wanted assurances that the peace clause under the Agreement on Agriculture would be extended to cover this program. Nevertheless, India did agree to the final Bali package. However, after the Modi-led NDA government came to power in May this year, India decided not to submit its protocol to ratify the TFA because India wanted assurances on the extension of the peace clause. As a result of India’s delay, the Members missed the July 31, 2014 deadline for ratification.