In July 2014, barely two months after Prime Minister Narendra Modi took office, India refused to let the Trade Facilitation Agreement (TFA) move forward at the World Trade Organisation. According to reports from Business Standard, international criticism mounted, and India was accused of blocking trade reforms. The government's refusal was driven by concerns over public stockholding (PSH) programmes that provide food security for approximately 80 crore people through the distribution of free foodgrains. These programmes involve the government purchasing rice and wheat from farmers at minimum support prices (MSP), maintaining public stocks, and distributing foodgrains through ration shops.
As reported by Business Standard, WTO rules impose limits on agricultural support, with the subsidy India can give for crops like rice capped at 10 per cent of the value of production. The real challenge lies in how subsidies are measured, as the WTO calculates support by comparing today's MSP with world prices from 1986-88, approximately four decades ago. For rice, this old reference price works out to roughly ₹3.5 per kg, which no one can grow or buy rice at today. Every rupee paid above this price is counted as a subsidy, making India's food security programmes appear excessive under international trade rules.
According to Business Standard, these concerns brought food security to the centre of WTO negotiations at Bali, Indonesia, in 2013. Members agreed to a temporary safeguard known as the peace clause that shielded existing PSH programmes from legal challenges. However, developed countries backtracked on their commitment, stating the peace clause would only remain valid until 2017. In September 2014, Prime Minister Modi and President Barack Obama held discussions that brought food security to the leaders' table, with an India-US understanding paving the way for a multilateral settlement. The WTO General Council confirmed in November that the peace clause would continue until a permanent solution was agreed upon.
As reported by Business Standard, India first invoked the peace clause after its support for rice in 2018-19 exceeded the WTO limit, using this safeguard seven times so far. The value of this policy space was particularly evident during COVID-19, when around 80 crore people received additional free foodgrains under the Pradhan Mantri Garib Kalyan Anna Yojana. Today, El Niño risks and global uncertainty reinforce why the ability to procure and maintain food reserves matters when livelihoods and food access are disrupted.
According to Business Standard, India's 2014 stand continues to protect farmers' livelihoods and preserve food security for millions of vulnerable people. Commerce Minister Piyush Goyal's efforts have brought together over 75 WTO members to press for a permanent solution, preserve existing safeguards, and protect food security interests of developing and least-developed countries. Prime Minister Modi reiterated during his 2025 Independence Day address that he stands 'like a wall' against harmful policies affecting India's farmers, asserting that India would never compromise on their interests.
