India has option to hit back at EU tariffs with retaliatory custom duties | India News

India-EU, India-European Union

India has a substantial interest in steel exports to the EU. (Representative Image)

India has the option to propose the imposition of retaliatory customs duties under the WTO norms on goods imported of a certain value from the EU, as the two sides have failed to reach a consensus on the European Union’s safeguard measures on some steel products, an official has said.

The EU has extended safeguard duties on certain steel imports, scheduled to expire this month, by another two years till 2026.

This is the second extension of the safeguards that take the form of the Tariff Rate Quota (TRQ), first imposed in 2018.

India is one of the countries affected by this measure as it has a substantial interest in steel exports to the EU.

In 2023-24, India’s iron and steel and their products exports to the EU increased to $6.64 billion from $6.1 billion in 2022-23.

India, along with other countries, has earlier raised concerns at the World Trade Organisation (WTO) over the European Union’s (EU) move to extend safeguard duty on the import of certain steel products till 2026.

New Delhi has also submitted its concerns to the EU regarding the manner in which safeguard measures have been extended and is violative of the global trade provisions and the WTO’s Agreement on Safeguards.

“India has substantial interest as an exporter of the products concerned. The EU’s measure is inconsistent with global trade rules. India and the EU officials held bilateral consultations on the issue earlier this month but both sides have not been able to reach a consensus on the matter. And now, India has the option to propose imposition of retaliatory customs duties under the WTO norms on certain value of goods imported from the EU,” the official said.

The commerce and steel ministries are deliberating on the quantum of impact.

The EU’s move follows the US decision to impose additional duties on steel imports during the Trump administration.

As per the WTO rules, if no agreement is reached on the compensation within 30 days of the consultations, India reserves its right to suspend concessions or other obligations substantially equivalent to the adverse effects of the measures under the WTO’s Agreement on Safeguards on the EU’s trade, and any other right available under GATT 1994 and Agreement on Safeguards.

In 2019, India sought consultations with the European Union under the aegis of the WTO against a move of the 28-nation bloc to impose safeguard duties on certain steel products. The country had sought these consultations under the WTO’s Agreement on Safeguards.

Against the US move to impose high customs duties on certain steel and aluminium products, the EU, in July 2018, proposed the imposition of definitive safeguard duties to protect their industry against a surge of imports.

India is concerned about the European Union’s move as it exports nearly 6 per cent of its steel output to Italy. Italy is a member of the EU.

In a similar issue, India has, in 2022, proposed additional customs duties of 15 per cent on the import of 22 products, including whiskey, cheese and diesel engine parts, from the UK in retaliation to Britain’s decision to impose restrictions on steel products.

New Delhi has also flagged serious concerns over the carbon tax being imposed by the EU on certain sectors like metal.

The WTO is a Geneva-based, 164-member global body which frames rules and norms for exports and imports and adjudicates trade disputes among member countries.

India is negotiating a free trade agreement with the EU to boost trade and investment ties.

India’s exports to the EU rose about 1.5 per cent to $76 billion in 2023-24, while imports dipped by about 3 per cent to $59.38 billion in 2023-24.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Jun 17 2024 | 6:45 PM IST

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