India has blocked a World Trade Organization global customs deal on Thursday, a potentially damaging move that could result in losses both politically and economically, according to WTO members.

The meeting in Geneva was supposed to have run smoothly as WTO member representatives were ready to sign a deal on "trade facilitation" that had already been settled in Bali last year.

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Proponents said that the deal could contribute an additional US$1 trillion to the world's gross domestic product and create 21 million more jobs.

However, India said it would hold its approval until its concerns were addressed.

India subsidizes food for its poor. However, this puts the country in a difficult position as it goes against WTO rules on stockpiling and subsidizing of crops.

In talks in Bali, the WTO had reassured India that it would be allowed to subsidize its crops until 2017 while a permanent solution could be agreed on.

While the WTO tries to resolve the problem before the deadline at the end of the month, several countries including Australia, Canada, Mexico, Switzerland and Thailand expressed dismay over India's decision on Thursday's meeting.

They said that a failure to reach an accord could be destructive to the organization which has been trying to negotiate the improvement of global trade for the last ten years.

The countries also warned that this could set back trade agreements discussed in Bali and eliminate chances for further trade reform.

The European Union also issued a similar warning, while Japan called for opposing countries to work towards a common objective.

Meanwhile, trade representatives said they are baffled by India's opposition since it failed to provide specific demands that would allow the WTO to address their concern.

Some speculate that India is trying to adjust the timelines, possibly to bring forward the 2017 cut-off for a decision on its stockpiling. Others think the country may be trying to delay the July 31 deadline to coincide the trade deal with other topics that WTO intends to take up by the end of the year.

TagsWTO, World Trade Organization, EU, European Union, trade deal, global trade, crop subsidy, crop stockpiling, WTO deal, WTO trade deal, global economy