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Abstract
Subsidies are the legitimate support by the government which may be financial or non-financial (policy oriented) which benefits the producers, exporters, consumers and other entities in the country. Subsidies are difficult to identify in a market setup through its effect rather to be understood through its theoretical definitions. Subsidies have the capability to provide support (benefit) to its receivers and at the same time they may affect the non-receivers of it i.e. other market players and more specifically the foreign players in case of international trade, either directly or indirectly for they may have the effect of undermining the protections like tariff concessions and quotas and distort the market access and sometimes they may also create wasteful expenditure and diversion of products and resources. Agriculture is a politically sensitive issue for almost all countries thereby also the agriculture subsidies. Hence the inevitability to deal with agriculture subsidies in the trade regime of WTO which preambles itself as trade liberalizing institution arose because agriculture subsidies invite protectionism in the international trade and may have the effect of restricting market access and trade distortion. Population in developing countries depends largely on its food security policies of governments and large chunk of them gets employment through agriculture in which agriculture subsidies also play a major role to support them. On the other hand, the developed world fears of the dumping of agriculture products from the developing countries as they have been able to produce more of late though it continues to give large farm subsidies to its producers itself. If no balance is achieved among the countries for the regulation and use of agriculture subsidies it is likely to be set back to WTO’s aim of liberalised trade and market access in agriculture and it would have its repercussions and implications on the trade relations with respect to other trade products as well. Paper seeks to determine the implications of the whole scenario for developing nations especially to India and suggests upon the same.