EU concerned over 'rising protectionism in India'

The European Union (EU) today raised a sharp concern over what it called “rising protectionism in India”, at the World Trade Organization (WTO).

New Delhi has not adhered to the recent G-20 assurances that leaders had agreed at the London meeting last month not to impose protectionist measures, the EU claimed.

At a WTO Safeguards Committee meeting, the EU said India had imposed five safeguard measures last month, arguing that New Delhi chose not to notify them to the trade body. An EU trade official said the Indian measures amounted to “protectionism”, pointing out that New Delhi should not deviate from what its leaders had agreed to at the London meeting.

In response, an Indian trade official told the EU that the five measures were already communicated to the WTO. The official maintained that India is well within its rights to initiate what are called safeguard actions taken to curb unforeseen imports that cause material injury to the domestic industry.

The EU must take up the matter with the appropriate Indian authorities because it is a “quasi-judicial process”, the Indian official pointed.

“While the EU is well within its rights to raise the issue at the WTO, it must first take up the matter with the concerned Indian authorities before airing its grievances,” Business Standard was told.

The EU and the US also simultaneously raised concern over the initiation of safeguard measures by the Indian authorities on Oxo alcohol, a chemical widely used by several industries.

India rejected the concern by the two trans-Atlantic trade giants, saying it has notified the initiation of safeguard action to the WTO. New Delhi, the Indian official said, has not imposed any provisional measure on Oxo alcohol, suggesting that the concerns were misplaced.

Besides Oxo alcohol, India’s safeguard actions on phthalic anhydride, dimethoate technical and linear alkyl benzene also figured during the meeting.

In the recent report on the trade restrictions imposed by WTO members in the face of economic crisis, India figured prominently for taking the largest anti-dumping actions.

Up until now, the industrialised countries used anti-dumping measures, a non-tariff barrier, on exports from developing countries.

Despite several WTO dispute settlement body rulings that dismissed the controversial zeroing methodology, which tends to inflate anti-dumping margins by an unlawful method of calculation, the US continues to use it.

Consequently, a WTO panel recently said Washington has not implemented the trade body’s recommendations in doing away with the zeroing methodology in a dispute raised by Japan.

But the trade body has not been able to prevent the US from using this methodology that affected exports from several countries, legal analysts said.