South Korea is planning to retaliate against New Delhi’s decision to impose country-wise quantitative restrictions on imports of isopropyl alcohol (IPA), a key ingredient in the production of hand sanitisers, by increasing import duties on selected Indian products, per a communication submitted to the WTO.

“Korea considers that various aspects of the safeguard measure are inconsistent with India’s obligations under… Agreement on Safeguards. The proposed suspension of substantially equivalent concessions and other obligations under the GATT 1994 will take the form of an increase in duty on selected products originating in India,” South Korea stated in its recent submission to the WTO Committee on Safeguards.

The Directorate General of Foreign Trade of India published a notification on March 31, 2023, imposing quantitative restriction on IPA, as a definitive safeguard measure, effective from April 1, 2023, for a period of one year.

This followed the finding of serious injury or threat caused by increased imports of the product, IPA, to the domestic industry, in an investigation carried out by the government. The findings of the investigation were notified by India, to the WTO, on February 3, 2022.

‘Not consistent with GATT’

The DGFT, in its notification, announced quarterly quantitative restrictions (QRs) for import of IPA in the April-March 2023-24 period. The QR has been fixed at 32,314 mt in each of the first and the second quarter while in the last two quarters, it is slightly higher at 34,085 mt. Of this, South Korea’s quota is 6,290 mt each in the first two quarters and 6,672 mt each in the last two quarters.

South Korea contended that the measures that have been announced by India were not consistent with India’s obligations under GATT 1994 and the Agreement on Safeguards. 

That is why, it said, it reserved its right to suspend the application of substantially equivalent concessions or other obligations towards India.

“The details of the suspension of concessions or other obligations will be provided to the Council for Trade in Goods before its application. The proposed suspension will come into effect within the timeframes foreseen… and it will continue to apply until India’s safeguard measure is lifted, or until an agreement on any adequate means of trade compensation…for the adverse effects,” South Korea’s representation stated.

comment COMMENT NOW