The Indian government is to launch a World Trade Organisation (WTO) challenge to countervailing duties imposed by the USA on certain steel products.
New Delhi has requested that formal consultations be undertaken at the WTOs Geneva headquarters. If these fail and that is to be expected then India will probably demand that a WTO disputes panel be established to rule on whether US countervailing duties on steel comply with world trade laws.
These laws allow tariffs, such as those India is protesting, to be imposed when a country subsidises the manufacture and export of a product to such an extent that its exporters can unfairly undercut local producers prices in importing nations.
India [has] requested consultations with the USA under the dispute settlement system, concerning the latters countervailing duties on certain steel products, a source at the WTO confirmed.
The US Department of Commerce last month imposed a preliminary import duty of nearly 286% on Indian circular-welded, carbon-quality steel pipe, based on such alleged subsidies.
We are currently reviewing the request, and will respond to it in due course, a US trade spokesperson told Metal Bulletin, but declined to give further details.
The main products exported to the USA from India are hot rolled coil and saw pipes, because of the high cost of transporting steel products, according to Arun Kejriwal, director of Kejriwal Research & Investment Services and a steel industry specialist based in India.
The major exporting company is Essar Steel, a private company, he noted.
The Indian government will make a strong case at the WTO, asserting that the US claims are incorrect, Kejriwal said.
However, the US government has already gone on record as saying that India has a wide range of subsidy schemes to reduce the price of its steel exports.
The US International Trade Commission released a report last December listing many of these. Examples cited include steel development fund loans, duty-free imports of manufacturing inputs, tax breaks for fuel purchases, and others.