India Opposes Making the WTO's Most-Favoured-Nation Rule Conditional at the G20 Trade Ministers' Meeting
The G20 Trade Ministers' Meeting was held in Milwaukee, Wisconsin (USA) from 30 September to 1 October 2026, hosted by the US Trade Representative under the United States' G20 presidency. Its agenda included updating the Most-Favoured-Nation (MFN) principle, structural excess capacity, forced labour and the weaponisation of food trade.
The United States proposed reforming the unconditional MFN principle, arguing that countries with very different trade relationships should not automatically get identical treatment.
India, represented by the Union Commerce and Industry Minister, said it cannot support making MFN treatment conditional on obligations chosen by some WTO members. India said MFN must give the same trading terms to the smallest and the largest traders.
On excess capacity (factories producing far more than the market needs, often because of subsidies), India agreed that trade-distorting support can cause dumping, but said the fix must be WTO-consistent tools such as anti-dumping and countervailing duties, based on evidence and open to judicial review, not one-sided action. India rejected the claim that it has structural excess capacity, calling itself a domestic-demand-driven economy of 1.4 billion people.
India also called for restoring the WTO's two-tier dispute settlement system and keeping special and differential treatment (extra flexibility) for developing countries.
On forced labour, India cited Article 23 of the Constitution, its ratification of ILO Conventions 29 and 105, and its July 2026 amendment to the Foreign Trade Policy banning imports made with forced labour.
The Most-Favoured-Nation (MFN) Principle
The Most-Favoured-Nation (MFN) principle is the basic rule of world trade that says: do not discriminate between your trading partners. If a WTO member gives a special benefit to one country, such as a lower import tax on its shoes, it must give the same benefit to the like products of all other WTO members, immediately and without conditions. The name sounds like "special favour", but it actually means equal treatment for everyone: every member is treated as well as the "most favoured" one.
The US used its G20 presidency to put the reform of unconditional MFN on the trade ministers' agenda in Milwaukee. India's response defends the original GATT Article I idea: the same terms for every member, big or small, without conditions set by a few. This is why India linked MFN to fairness, predictability and policy space for developing countries.
WTO Dispute Settlement Mechanism
The WTO dispute settlement mechanism is the system the WTO uses to settle trade fights between its members. A member that thinks another member's trade measure breaks WTO rules files a complaint; a panel of independent experts gives a ruling; and, in the original design, either side could appeal to a standing Appellate Body. This two-step structure is what India means by the "two-tier" system.
India told the G20 trade ministers that trade remedies must be "subject to judicial review" and that the WTO's two-tier dispute settlement must be restored. Without a working Appellate Body, the WTO cannot give final rulings, which makes it harder to stop one-sided trade actions.
Trade Remedies: Safeguard Measures, Anti-Dumping, and Countervailing Duties
Trade remedies are special, temporary import duties or limits that WTO rules allow a country to use to protect its own industry from harmful imports. There are three types. Anti-dumping duty is used against goods sold abroad at unfairly low prices. Countervailing duty is used against goods that are cheap because of foreign government subsidies. Safeguard measures are used when a sudden surge of imports, even fair ones, seriously hurts local producers.
At the G20 session on excess capacity, India agreed that hidden subsidies can lead to dumping and predatory pricing. But it said the answer is these WTO-consistent tools, anti-dumping and countervailing duties, based on evidence and open to judicial review, rather than unilateral measures. This keeps corrective action inside agreed multilateral rules.
- G20 Trade Ministers' Meeting: Milwaukee, Wisconsin, USA, 30 September to 1 October 2026, under the US G20 presidency
- Agenda: updating the MFN principle, structural excess capacity, forced labour, weaponisation of food trade
- India's stand: no conditional MFN; trade remedies must be WTO-consistent; restore two-tier dispute settlement; keep special and differential treatment
- India's population cited: 1.4 billion (domestic-demand-driven economy)
- Forced labour: Article 23 of the Constitution; ILO Conventions 29 (Forced Labour) and 105 (Abolition of Forced Labour) ratified by India
- India amended its Foreign Trade Policy in July 2026 to prohibit imports made with forced labour
- WTO: 166 members; MFN in GATT Article I