Sri Lanka, along with 13 other countries, has backed a US complaint at the World Trade Organization (WTO) against India’s export promotion schemes, increasing the likelihood that India could end up the loser in the trade dispute. India media reports indicated that Sri Lanka has turned against its traditional ally in this instance with hopes of gaining an edge in exports, as the two countries compete on several export goods and services. Sri Lanka’s exports in 2017 hit an all-time high of $ 11.4 billion, up 10% from 2016, led by tea, apparel, ICT/BPM, logistics, financial services and construction. The Ministry of Development Strategies and International Trade had said the EU and the US were the biggest markets importing $ 3 billion each. Buoyed by these figures, the Government has set an export target of US$ 17.5 billion for 2018, and by the end of July, the island had achieved 60% of the target. Apart from Sri Lanka, the European Union, Brazil, Canada, China, Egypt, Japan, Kazakhstan, Korea, Russia, Taiwan and Thailand have sided with the US against India’s export promotion schemes, joining the dispute as third parties. China, Korea, Japan and Thailand are members of the Regional Comprehensive Economic Partnership (RCEP) trade agreement along with India and have been pressuring it for deep duty cuts on at least 90 per cent of the traded goods. The US has complained to the WTO’s dispute settlement body about India’s export-related subsidies, citing the Agreement on Subsidies and Countervailing Measures (ASCM), which has pegged the subsidies at $7 billion. The complains are about five specific schemes: export-oriented units scheme and sector- specific schemes, including electronics hardware technology parks scheme; the merchandise exports from India scheme; the export promotion capital goods scheme; special economic zones; and, the duty-free imports for exporters programme. The WTO has set up a panel under the Philippines’ Jose Antonio S Buencamino as the two sides have failed to find a mutually agreed solution through consultations. The panel’s other members are South Africa’s Leora Blumberg and Switzerland’s Serge Pannatier. The panel has to circulate its report to all WTO members within 90 days of the date of its composition and the establishment of its terms of reference, which has put added pressure on India to prepare its defence.