India's WTO Beef With US Over Steel Pipe

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The trade war between India and the United States intensified further as New Delhi has approached the World Trade Organization (WTO) against the US for imposing import duties on certain Indian steel products, reports Business Line.

According to a posting on the WTO’s website on April 12, India requested consultations with the US under the dispute settlement system concerning the latter’s countervailing duties on certain steel products from India. The WTO site states more details on the trade dispute will be made available in the next few days. (Ed. note: read more on what consultations really mean.)

Reports reaching here from Washington suggest that the US Commerce Department has set a preliminary import duty of nearly 286 percent on circular welded carbon quality steel pipes from India to offset government subsidies and a duty of slightly more than 8 percent on the same product from Vietnam.

However, the Commerce Department declined to set preliminary duties on imports from Oman and the United Arab Emirates, saying it found little or no subsidies for steel pipe producers in those countries.

A PTI report stated a final decision on duty rates is expected in August. The United States imported about $64.5 million of the steel pipe from India and $50.1 million from Vietnam. It imported $28.1 million from Oman and $53.9 million from the UAE.

The US duties on steel exports have affected a number of Indian steel companies including Essar, Tata, Jindal and Sail.

Media reports suggest that the move comes just a few weeks after the US sought similar consultations with India over the import ban imposed by the country on poultry and poultry product imports because of the bird flu scare. It has been reported in Indian print media that India also has plans of filing a formal complaint with the WTO over the professional visa fee hike carried out by the US.

It is believed that Washington has imposed a duty on the premise that state-owned National Mineral Development Corporation (NMDC) may be supplying iron ore at subsidized prices to Indian steelmakers, giving them an advantage. Indian steel manufacturers purchase a large amount of their iron ore from NMDC, the country’s largest iron ore producer.

But India claims that the corporation sells iron ore at prevailing market rates, which are determined by their exports to Japan and South Korea.

As for the two countries’ recent history with the WTO, earlier in March, the US brought a case against India’s ban on imports of certain American farm products, including poultry, meat and eggs. The US had termed the ban as “unjustified.”

The US has been imposing countervailing duties (CVD), a levy to neutralize government subsidies, on steel for the last decade. Duties on Indian companies range from about 18 percent on Essar to over 500 percent for companies such as Tata and Jindal.

It has also imposed antidumping duties, a penal levy on imports that are sold at higher prices in the home market of the exporter, of over 20 percent.

TC Malhotra contributes to MetalMiner from New Delhi.

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