Australia has referred India to the World Trade Organisation over heavy subsidies paid to cane farmers, creating an international sugar glut affecting thousands of Australian farmers.
But Trade Minister Simon Birmingham has acknowledged the action - which will prompt discussions on the issue through the WTO - could take a long time to be resolved.
"It may end up taking some time and I know that the representatives of cane growers and sugar millers understand that," Senator Birmingham told ABC Radio on Friday.
"They have been urging us to take this step and we've been listening very carefully to them.
"Ultimately this is about trying to ensure we get a fair go for our sugar farmers who play by the rules and they just want to be able to compete."
The action, known formally as a counter notification, comes after Australia has repeatedly raised the issue with India directly.
It means the issue will initially be discussed at the WTO's Committee on Agriculture meeting scheduled for later this month.
Senator Birmingham hopes the move will change India's mind.
"We really do hope that India will reconsider its position in relation to what are more than $1 billion in additional subsidies for sugar producers, which has pushed global sugar prices to a decade low."
Canegrowers chairman Paul Schembri said although the step doesn't resolve the subsidies, the government should be commended for flagging the issue at the highest global level.
"It takes the very real difficulties of Australian farmers into an international forum and places further pressure on the Indian government to change its sugar policies," he said.
Australian sugarcane producers export 80 per cent of their product and need fair, rules-based trade regulations to remain competitive, the National Farmers' Federation said in welcoming the move.
"By taking the serious step of issuing a counter-notification to the WTO, Australia has escalated the concerns and encouraged other countries to also register their discontent," NFF chief Tony Mahar said.
Senator Birmingham dismissed concerns the step could hamper Australia's efforts to ramp up trade with India.
"Our relationship with India is much, much deeper than one issue."
Prime Minister Scott Morrison raised the bitter sugar dispute during a meeting with his Indian counterpart Narendra Modi on Wednesday, on the sidelines of the East Asia Summit in Singapore.
Mr Morrison indicated Australia would take all available steps to deal with the dispute.
Australian Associated Press
