By Rajesh Roy

NEW DELHI--India's prime minister and his cabinet are expected to decide on Wednesday whether to effectively block a global trade deal, a senior Indian trade official said.

India has said it would not ratify a World Trade Organization trade facilitation agreement reached last year in Bali, Indonesia, if it isn't given more freedom to help its poor citizens.

India provides a comprehensive package of subsidies to farmers to encourage them to produce more as well as stockpile food for distribution in welfare programs. Government-run agencies buy food grains--mainly wheat and rice--from farmers at a minimum assured price that is normally higher than market prices. Grains procured from farmers are stockpiled by state-run agencies and sold to the poor at a subsidized price under the various welfare programs. Farmers also receive subsidies for the purchase of diesel, fertilizer, and inexpensive credit for loans from banks.

To take effect, the Bali pact on trade facilitation needs to be approved by all 160 WTO members.

"We want the Bali package to be implemented, but in totality. Our concerns should be addressed," the trade official, who didn't want to be identified, told reporters in New Delhi on Monday.

The official said India's position would be assessed by the cabinet at its meeting on Wednesday.

Indian Trade Minister Nirmala Sitharaman raised New Delhi's demands at the meeting of trade officials of the Group of 20 industrial and developing nations in Australia on Saturday.

Afterward, Australian Trade Minister Andrew Robb said there was a strong affirmation of the Bali agreement. He said further talks were likely with India to iron out remaining concerns.

Members of the WTO are trying to ratify the deal struck in December, which would standardize and streamline customs procedures around the globe. The initiative has to be ratified by the end of this month and sets mid-2015 as a deadline for implementation.

India's concerns deal in part with financial support for poorer countries to meet the requirement of the trade facilitation agreement, and secondly with its own concerns around food security.

The WTO has a formula to define how much money a country can spend creating a food stockpile and for the sort of subsidies India provides to support farmers. Currently, India spends around $12 billion on agricultural subsidies every year, and could breach the WTO limit of 10% of the total value of agricultural produce once it implements an ambitious new food-security program for the poor.

Write to Rajesh Roy at

(END) Dow Jones Newswires

July 21, 2014 12:25 ET (16:25 GMT)

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