Economy

EU’s tweaking of steel import safeguard rules: India initiates talks with bloc

Amiti Sen New Delhi | Updated on June 17, 2020 Published on June 17, 2020

Steel units’ utilisation will range between 50-60 per cent this fiscal due to demand drop, and logistics and labour constraints

Changes in EU’s tariff rate quota regime may affect India’s exports

India has initiated discussions with the EU on its proposed adjustment of safeguard measures on steel imports which could affect Indian exporters.

“New Delhi, in a submission at the World Trade Organisation, has said that as it has substantial trade interest in the export of steel, it wants to participate in discussions on how the measures should be implemented,” according to an official.

EU tariff quotas

The EU put in place tariff rate quotas (TRQs) on steel imports as a safeguard measure in 2018 following the US decision to impose additional import duties on steel from a number of countries including Russia, India and Turkey.

The bloc was concerned about a spike in imports due to diversion from the US market. It fixed quotas for steel imports for exporting countries beyond which the items would attract additional import duties of 25 per cent.

“Last year the EU had replaced the provisional safeguard measures with definitive measures and Indian exporters had tailored their exports as per the TRQ put in place. But now, the EU has proposed adjustments in the TRQ administration which could make the situation tougher to negotiate,” the official said.

India is among the main steel exporters to the EU which also includes China, Russia, South Korea, Turkey and Ukraine.

Indian exports hit

Steel exports from India to the EU has taken a beating since the safeguard measures were imposed in 2018.

Owing to restrictions on imports of steel put in place by major consumers including the EU and the US, India became a net steel importer during 2018-19, the first time in three years.

According to EU’s latest submission, it wants to move to a quarterly management of all country-specific quotas to ensure that imports are evened out and there is no surge during the remaining duration of the measures. It also wants to introduce a refined access regime for the residual quota to be accesed by smaller exporting countries.

“India wants to understand more deeply how the proposed measures could affect exporters from the country,” the official said.

When a country is using quota restrictions as a safeguard measure, basic discipline needs to be followed, said a Delhi-based trade expert.

“A country can’t reduce the quantity of imports below average imports of past three years. If it does, then some reasons have to be provided,” he said.

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Published on June 17, 2020
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