The use of agricultural subsidies by India and other developing countries has remained and continues to remain one of the most contentious issues within the WTO (World Trade Organization) framework. In India, agriculture has been closely linked to food security, rural life and poverty alleviation. The paper examines India’s use of agricultural subsidies in detail and connects it to the broader debate within WTO between liberalization and protectionism. The paper begins by highlighting the basic subsidy framework under WTO, particularly explaining the SCM agreement in detail. The paper then moves forward and discusses India’s use of agricultural subsidies by highlighting the areas within Indian agriculture wherein public investment has played and continues to play a crucial role. The third section of the paper focuses on the contentions raised by WTO and the arguments provided by India to defend its position. The last section of the paper seeks to answer as to what extent is India justified in its use of agricultural subsidies, however subject to the WTO framework rules.