India likely to file dispute at WTO if U.S. rejects exemption on tariffs: sources

NEW DELHI (Reuters) - India would lodge a trade dispute against the United States at the World Trade Organisation if Washington does not grant it exemptions from higher tariffs on steel and aluminium, three government officials involved in trade talks told Reuters.

India recently requested exemptions, arguing that its exports of these products to the United States did not create a security concern for a country with whom it has a strategic partnership that goes beyond trade.

Three senior officials who did not want to be named said New Delhi would file a case citing discrimination with the WTO as a first course of action if the U.S. did not grant the exemptions.

Indian Steel Minister Chaudhary Birender Singh declined to say how India might respond if its request for exemption was rejected.

"Our proposal is still pending with the U.S. government and they have assured us they will reconsider," Singh told Reuters.

However, an internal note prepared by his ministry and seen by Reuters showed India could also consider temporarily raising the basic customs duty on some U.S. goods in the event the exemptions were not granted.

(Reporting by Neha Dasgupta; Editing by Sam Holmes)