India will block Japan’s request for a dispute settlement panel at the World Trade Organisation (WTO) against penal duties on steel imports imposed by New Delhi, a government official has said.
Tokyo’s request will be taken up for consideration by the Dispute Settlement Body of the World Trade Organisation in its meeting on Tuesday.
“We are definitely going to block the request. Our argument is that India has not flouted any norms while imposing safeguard duties on certain categories of steel,” the official said.
Japan, however, is expected to make a second request in the next DSB meeting which cannot be blocked as per rules.
In March last year, India had extended safeguard duties — penal duties imposed over and above the regular customs duties to check import surges of identified items — on certain hot-rolled steel items till March 2018. The move was aimed at protecting domestic steel producers suffering from the double blow of low demand and cheap imports.
Japan has alleged that the investigation carried out by the Directorate General of Safeguards in India was not according to procedures laid down by the WTO and the injury determination, which is a measure of disruption suffered by local players, was also faulty.
The Japanese government has estimated that the tariffs could cost Japanese steel companies about $220 million through March 2018, as per reports in the Japanese media.
“We tried to convince Japan in our bilateral consultations on the dispute that no rules had been breached and the safeguard duties were progressively being brought down. But Japan chose to ask for a dispute settlement panel,” the official said.
Japan, which has friendly trade relations with India, is taking the strong step of filing a dispute to stop unfair trade actions from spreading, a Japanese industry ministry official reportedly said.
India imposed minimum import price and safeguard duties on steel imports last year to protect the domestic industry.
As per the Finance Ministry’s notification, safeguard duty will apply on hot-rolled flat products of non-alloy and other alloy steel in coils of 600 mm width.
The safeguard duty will be 20 per cent minus any existing dumping duty till September 2016, following which it will be reduced to 18 per cent till March 2017, then brought down to 15 per cent till September 2017 and eventually to 10 per cent by March 2018.