Indian Finance Minister Arun Jaitley.

New Delhi - India has defended its decision to scuttle a landmark worldwide trade deal, saying its farmers faced suicide and starvation if the government had backed down on its tough stand at the WTO.

Finance Minister Arun Jaitley said the new right-wing government could not agree to the deal to streamline global customs rules unless the World Trade Organization adequately addressed its demand on stockpiling food.

“The fact of the matter is there have been many instances in history where India has been forced to raise its voice against the powerful nations,” Jaitley told the NDTV network late on Monday.

Jaitley is the most senior Indian minister to comment on the issue since India refused to ratify the long-sought deal at the WTO by the July 31 deadline.

The deal, which needs the agreement of the WTO's 160 members, would add $1 trillion (R11 billion) and 21 million jobs to the world economy, according to some estimates.

US Secretary of State John Kerry told Prime Minister Narendra Modi during talks last week that India's position on the deal sent the wrong message on opening up the country's economy.

India is unhappy with progress on negotiations to give the green light on both stockpiling food and farm subsidies.

India's nationalist government, which came to power in May, insists that a permanent agreement on food stockpiling must be agreed swiftly.

India, which has sought since independence to eradicate hunger, buys grain at above-market prices from farmers and sells the food at subsidised prices to some of the hundreds of millions of poor.

The stockpiling is popular with poor voters in the world's largest democracy, but wealthy nations say that the policy distorts global markets.

Jaitley said India must be allowed to continue the measures without fear of challenge at the WTO to feed its poor and protect its impoverished farmers from ruination.

“Our farmers will be reduced to starvation and suicide. We can't be a party to that,” he told the network.

“If we did not have the (measures) this few hundred suicides that you hear of would be in lakhs (hundreds of thousands).”

The WTO's members gathered in Geneva last week for what was envisioned as a rubber-stamp approval of the customs deal called the Trade Facilitation Agreement which was reached in Bali last year.

When the Bali deal was struck, WTO members agreed on a “peace clause” to allow India's food stockpiling with no penalties until a “permanent” solution by 2017.

But Jaitley said the lack of progress on negotiations meant it was unclear when a permanent solution would be found. - Sapa-AFP