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NEW DELHI, May 6

INDIA today said that it was not interested in invoking the remedial measures available under the dispute settlement understanding (DSU) of the World Trade Organisation (WTO) for settling the rules of origin problems with the US.

The US had altered its rules of origin norms, thereby impeding the flow of Indian textile exports to the Americas. "We strongly believe that we could handle the problem of rule of origin at the bilateral level. We are not interested in going to the DSU on this matter," said the Additional Secretary, Ministry of Commerce and Industry, Mr S.N. Menon.

Addressing a meeting organised by the Confederation of Indian Industry (CII) on the occasion of the visit of the US Assistant Secretary of Commerce for Market Access and Compliance, Mr William H. Lash III, Mr Menon said the di-ammonium phosphate (DAP) issue raised by Mr Lash could be "mutually discussed" at a bilateral level.

Mr Menon made it clear that India's "growth will be steady" even if it may be slow. "Don't expect dynamic growth rates like those seen in China from India. But at the same time, India's growth will be surefooted and strong," he said. He wanted the developed countries to reciprocate actions that are aimed at reducing barriers to trade.

"Just as we open our economy for the benefit of others, we expect the developed countries should work towards reducing their domestic support so that items of our interest can be exported to such countries," Mr Menon said.

Addressing the meeting Mr Lash said that it was up to the Indian Government to decide whether economic ties and not political or security ties should be the anchor of relationship between the two countries. He added that economic ties preceded political and security ties in most of the countries that the US engaged with. He held that the best way for a country to engage with the US is to keep its markets open.

Answering a question on the recent safeguard measures initiated by the Bush Administration against steel imports into the US, Mr Lash maintained that the measures were "totally WTO consistent". He added that a number of developing countries were largely exempted.

When questioned on how the Bush Administration, as a votary of free trade, reconciles between the harsh measures on imports of steel into the US and the heavy subsidies given to its own steel industry, Mr Lash maintained that "we do not directly subsidise our steel industry".

Mr Lash held that India could occupy a prominent position in trade among the comity of nations if it were to remove all the trade barriers and make it a more attractive destination for investments.

On whether the Bush Administration perceives an adverse impact on foreign investments into the country after the Gujarat incident, Mr Lash said that the "Gujarat tragedy was more of a humanitarian issue than an investment issue", even as he held that "capital looks for a safe environment" to generate returns.

The visiting dignitary held that the Indian policies (including domestic support) on DAP were trade restrictive.

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