India has lost a case filed by the US at the WTO against domestic export incentives. The dispute settlement panel of the WTO on Thursday concluded that these schemes were inconsistent with the international trade norms.

With this ruling, India will have to rework these incentive schemes to comply with the WTO ruling.

However, India will appeal against the ruling, an official said. “India will be appealing the decision of the panel regarding four schemes to the Appellate Body of the WTO,” the official said.

On March 14 last year, the US had dragged India to the WTO’s dispute settlement mechanism over New Delhi’s export incentive schemes, including the Merchandise Exports from india Scheme (MEIS); Export Oriented Units (EOUs) and Export Promotion Capital Goods (EPCG) schemes; and duty free imports for exporters scheme.

The US had alleged that these schemes were harming American companies.

The dispute panel in its report has concluded that most of these schemes such as the EOUs, Electronics Hardware Technology Parks Scheme, EPCG and MEIS are inconsistent with certain provisions of WTO’s Agreement on Subsidies and Countervailing Measures.

The dispute panel recommended that India should withdraw the prohibited subsidies under duty-free import for exporters programme within 90 days from the adoption of the report.

It should also withdraw the prohibited subsidies under the EOU/EHTP/BTP schemes, and EPCG and MEIS schemes, within 120 days; and the SEZ scheme within 180 days.

The panel has stated that India will not get an eight-year period like other developing countries for phasing out these schemes.

According to trade experts, the ruling would impact India’s exports and the government will have to immediately work on alternatives to the schemes.