India moves WTO against US for putting high import duty on steel, aluminium

Taking forward trade dispute with America in the World Trade Organization (WTO), India has asked the Geneva-based multilateral body to set up a panel against the US for imposing high import duties on certain steel and aluminium products, an official said.

India took this decision after both the countries failed to resolve the issue in a bilateral consultation process under the dispute settlement mechanism of the WTO.

Consultation is the first step of the dispute settlement process in the organisation. If the two countries are not able to reach a mutually agreed solution through consultation, a country can request for a WTO dispute settlement panel to review the matter.

"So, now, India has asked the WTO for the establishment of the dispute panel on the matter," the official said.

Imposition of high import duties on these items by the US has impacted exports of these products by Indian businesses. The US move is also not in compliance with global trade norms.

Besides India, Russia, Norway, Canada, Mexico, Switzerland, and European Union have dragged the US in the WTO on America's move to impose 25 per cent and 10 per cent import duties on certain steel and aluminium products, respectively, which has triggered global trade tensions.

"We have discussed the matter with all these countries. A common dispute panel could be formed on the matter," the official added.

India has a significant export interest to the US on the steel and aluminium sector. As per estimates, India exports steel and aluminium goods worth about $1.6 billion a year to America.

The US had imposed these duties on grounds of national security.

Biswajit Dhar, professor of economics at Jawaharlal Nehru University, said the US decision would not only impact India's export of these goods but would also affect global trade.

"The entire basis of the US action is based on its own perception of security threat issue. This cannot be a ground to impose these duties," Dhar said.

Some experts, however, said that dragging the US in the dispute over the issue is not in favour of India, as New Delhi has a trade surplus with America.

India's exports to the US in 2017-18 stood at about $48 billion, while imports were $26.7 billion.

Both the countries are also involved in several other disputes in the WTO. Those disputes are in the areas of poultry, export incentives, solar and steel.

In retaliation to the imposition of duties by the US, India has decided to increase customs duty on 29 American products such as almond, walnut, pulses and iron and steel items. The duties would come into effect from December 17.