A compromise formula has been reached between India and the United States today on food subsidies ending the issue which has stalled World Trade Organization (WTO) deal on easing of customs rules.

The revised proposal says that India and the US have agreed for an indefinite 'peace clause" on food security till they find a permanent solution to this matter. A "peace clause" will protect India from facing any kind of challenge under other WTO agreements.

It is to be noted that the Indian government was putting pressure on the WTO for a guarantee for further exemption till a permanent solution is found. The government was also asking to find a way to allow countries the right to provide higher levels of subsidies for their poor beyond these four years.

"The United States and India reached agreement today (Thursday) on a set of measures intended to break the impasse in the work of the World Trade Organization (WTO) to implement the agreements reached last December," said a US government statement.

As per the deal it was agreed that food security programmes of India would not be challenged under WTO rules "until a permanent solution regarding this issue has been agreed and adopted," it said.

Commerce Minister Nirmala Sitharaman tweeted that India and the US had "successfully resolved their impasse over food security issues in #WTO". "WTO General Council will receive India's proposal and US will support us," she said.

It is learned that Prime Minister Narendra Modi was of the view that without a permanent solution on food subsidies, public stockholding programmes will be hampered.

"The agreement announced today (Thursday) between the US and India paves the way for full implementation of the WTO's Trade Facilitation Agreement (TFA)...The agreement also reflects shared understandings regarding the WTO's work on food security," US Trade Representative Michael Froman said in a statement.