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The European Union has accused India of imposing higher penal duties on imports of certain products such as steel and rubber chemicals than what the situation may warrant to protect its domestic industry.
While claiming that its penal duties were in response to aggressive exports by some countries, India conceded that it would look into complaints made on the initiation of safeguard investigation on steel pipes and tubes.
India has initiated the highest number of safeguard investigations in 2013 and half the products being investigated are already subject to anti-dumping duties, the EU pointed out at a recent meeting of the World Trade Organisation’s (WTO) Safeguards Committee.
The WTO allows members to impose penal duties called anti-dumping duties if it can be proved that the imports are being dumped into the country at lower prices than those prevailing in domestic market of the exporting country.
A second penal duty known as safeguard duty can be imposed by a member in case there is a sharp increase in imports of a product over a period of time leading to disruption in the domestic market.
Recently, India notified four safeguard investigations – on seamless pipes, tubes and hollow profiles of iron or non-alloy steel, on sodium nitrate, on methyl acetoacetate, on phthalic anhydride, and on PX-13 (a rubber chemical).
The safeguard initiation on steel products has led to protests from a number of WTO members including the EU, Russia and the US.
The EU said that it was very concerned that in the steel case, imports had decreased and that there was no evidence of injury caused by imports on the domestic industry.
Russia shared EU’s concerns in the steel case, and pointed out that the increase in imports was caused by just one country – China. Japan also expressed concern.
India’s representative said that the concerns would be conveyed to the Government and a reply would be given.
On India’s investigation on PX-13, the EU said that the extension of the safeguard measure would not be warranted, as this product was already subject of an anti-dumping duty.
The US, too, sought clarification regarding the investigation. India said it would forward the questions to New Delhi.
Over the last few years, India has resorted to imposition of safeguard duties on cheap imports instead of anti-dumping as it is more difficult to prove that dumping has actually happened.
While most of the safeguard duties are imposed to protect Indian producers against cheap imports from China, other countries, too, get affected as these duties are applicable to all.
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