EU accuses India of not meeting requirements of WTO’s Safeguard Agreement

The European Union, the US, Japan, Russia and Chinese Taipei are upset over the “high number” of investigations being carried out by India to impose steeper import duties on a number of products across sectors.

India is doing this to protect its industry from cheap imports.

The higher duties are in the form of penalties imposed under the World Trade Organization’s Safeguard Agreement. This Agreement allows such levies in case there is a “surge’’ in imports hurting the domestic industry.

The Government recently notified five safeguard investigations on sodium citrate, bare elastomeric filament yarn, saturated fatty alcohol, not-alloyed ingots of unwrought aluminium, and seamless pipes. Three of the investigations were initiated in the first quarter of 2014.

India has also been accused by the 27-member EU of not meeting the requirements of the Safeguard Agreement while launching these investigations, an official who attended a recent meeting of the WTO’s Safeguards Committee, told Business Line.

India’s defence

India, in its defence, has submitted that its safeguard investigations feature checks and balances that involve several Government agencies and are consistent with the WTO agreement, said a Commerce Ministry official.

The US pointed out that India has imposed 30 safeguard measures since 1995, the highest by any WTO member. It said India should reflect on its methods and procedures in the light of the Safeguard Agreement.

In February, the Finance Ministry imposed a safeguard duty of 30 per cent on import of sodium nitrite — a white crystalline powder mostly used in pharmaceuticals, dyes, construction and chemical industries — for a year.

The government sees nothing wrong in the high number of safeguard measures it has imposed. “India imports a large variety of items, which is why the number of safeguard duties is relatively high… The fact that we are seldom challenged shows that we do not bend rules,” the official said.

Interestingly, India had challenged the safeguard duties imposed by Turkey on cotton yarn in 2012, following which that country withdrew the levies.

(This article was published on May 5, 2014)
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