India is firming up its arguments to convince Japan that its concern on safeguard or penal duties imposed by New Delhi on certain steel imports was misplaced, as they were in line with World Trade Organisation (WTO) rules and there was no need for a full-fledged dispute on the matter.

“The Director-General (Safeguards) is going through the points raised by Japan against the calculation of our safeguard duties so that it could build up its arguments to defend the duties. The Ministries of Steel and Commerce are also working on the matter,” a government official told BusinessLine .

A date for consultations between Japan and India has not yet been firmed up where the two sides will discuss the issues of contention face-to-face.

Last month, Japan requested dispute consultations with India at the WTO on ‘certain measures on imports of iron and steel products’.

While such ‘measures’ include both safeguard duties (levy imposed to stop a surge in imports that are hurting domestic producers) and minimum import price (MIP) on some steel items, New Delhi is focussing on dealing with the former.

Focus on safeguard duties

“We are not too worried about the complaint against MIP as the number of items on which it has been introduced has already been brought down to 19 and may go down further next month. Our whole focus is on defending our safeguard duties,” the official added.

The safeguard duties imposed on hot-rolled steel products in March 2016 is being slowly tapered but would be in place till March 2018.

“DG (Safeguards) will need to go through its ruling and establish yet again to Japan that its judgement was based on prescription laid down by the WTO and there had indeed been a surge in imports of the identified steel items over the past months that had hit sales, production and profits of domestic companies,” the official said.

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.

If Japan is not convinced with India’s explanations, it would ask the WTO to establish a dispute settlement panel to decide on its complaint. An adverse ruling may not only force New Delhi to revoke the safeguard duty on steel but may also have implications on imposition of safeguard duties on other items.

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