As per the US, India seems to be providing such subsidies through various export promotion programmes, special economic zones and duty-free imports for the exporters' programme.
The World Trade Organisation's (WTO) dispute settlement body will create a committee to look into America's allegations against certain alleged export subsidy measures in India.
The US, last month, had lodged a case in the multilateral trade forum. It alleged that these incentives were not in accordance with global norms and also badly affecting American companies.
"At its meeting on 28 May, the WTO's Dispute Settlement Body agreed to a request from the United States for the establishment of a dispute panel to examine certain alleged export subsidy measures in India," the WTO said in a statement.
The US stated that all WTO members, including India, should follow provisions of the WTO's Agreement on Subsidies and Countervailing Measures, including refraining from providing subsidies contingent upon export performance.
As per it, India seems to be providing such subsidies through various export promotion programmes, special economic zones and duty-free imports for the exporters' programme.
The US alleged thousands of Indian companies are receiving benefits totalling over $7 billion annually through those schemes.
The size and scope of export programmes increased even after the expiry of India’s exemption under the WTO’s special and differential provisions for developing countries in 2015.
Under existing WTO rules, a country can no longer offer export subsidies if its per capita GNI has crossed $1,000 for three years in a row. In 2017, WTO notified that India’s GNI was $1,051 in 2013, $1,100 in 2014 and $1,178 in 2015.
During consultations with the US last month, India stated that the WTO informed the country only in 2017 that it has crossed this threshold and hence should get the eight-year period from 2017 to cut its exports subsidies.