WTO Current Affairs

India notifies WTO of its decision to impose higher import tariffs on 30 US goods

India has notified World Trade Organisation (WTO) of its decision to impose higher import tariffs (ranging from 20 to 50%) on 30 goods from United States. It includes motorcycles (engine capacity of more than 800 cc), heavy machinery, certain iron and steel goods, boric acid as well as large number of agro products such as almonds, shrimps and chocolates. It is expected to rake in additional $240 million to India.

Key Facts

This will reportedly be the first time that India has imposed retaliatory import duties against US’s unilateral protectionist policies that range from tighter visa regime to higher import duties. The proposed increase in import duties is aimed at countering the impact of higher US tariffs on certain Indian steel and aluminium products, which is going to put burden on $241 million on India.

India imposed retaliatory import duties after it received cold shoulder from US on its request for exempting India from the higher tariffs announced by the US on steel and aluminium imports. India also had dragged US to WTO dispute settlement mechanism over the imposition of import duties on steel and aluminium. India’s exports of steel and aluminium products to US stood at about US $1.5 billion every year. Its exports to US in 2016-17 stood at US $42.21 billion, while imports were US $22.3 billion.

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India drags US to WTO over imposition of duties

India has dragged United States (US) to World Trade Organisation’s (WTO) Dispute Settlement Mechanism over imposition of import duties on steel and aluminium. India stated that decision will of imposition of import duties impact its exports of these products to US and is not in compliance with global trade norms.

Key Facts

India has sought consultations with US as first step of dispute settlement process under the WTO’s dispute settlement mechanism. If the two nations are not able to reach mutually agreed solution through consultation, India may request for WTO dispute settlement panel to review matter.

Background

In March 2018, US President Donald Trump had imposed heavy import tariffs on imported steel and aluminium items, a move that has sparked fears of global trade war. He had signed two proclamations that levied 25% tariff on steel and 10% tariff on aluminium imported from all countries except Canada and Mexico. India had sought exemptions from the hefty tariffs. US decision had not only impacted India’s export of these goods but also affected global trade. India’s exports of steel and aluminium products to US stood at about US $1.5 billion every year. India and US are already involved in disputes at WTO, a global trade body. The disputes are in the areas of poultry, solar and steel. US recently had filed dispute against India on export incentives alleging these support measures harm its workers by creating an uneven playing field.

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