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The US has asked the World Trade Organisation (WTO) to set up a dispute panel to settle its disagreement with India over retaliatory import duties imposed by the country on 28 American products which include walnuts, apples, almonds, chemicals, chickpeas, pulses and some steel products.
New Delhi imposed higher duties on select items imported from the US in June this year in response to Washington’s decision to increase import duties on Indian aluminium and steel by 10 per cent and 25 per cent respectively in 2018 on the ground of security concerns.
“The additional duties measure applies only to products originating in the United States. The additional duties measure does not apply to like products originating in the territory of any other WTO Member, and thus appears inconsistent with the most-favoured nation obligation in Article I of the GATT 1994,” the US said in its submission to the Dispute Settlement Body (DSB) of the WTO.
Moreover, the additional duties measure results in rates of duty greater than the rates of duty set out in India’s schedule of concessions, and thus appears inconsistent with multilateral trade rules, the submission added. The DSB will respond to the request possibly in its next meeting.
The US had requested consultations with India on the matter in July which is the first step that a complainant needs to take before it requests for a dispute panel to be formed. “Unfortunately, these consultations did not resolve the dispute,” the US submission said.
India has been defending its move on the ground that retaliatory tariffs are permitted under the WTO’s Agreement on Safeguards. The US, however, argued that the additional import duties imposed by it on Indian steel and aluminium were not safeguard duties (imposed when there is a surge in imports on a particular commodity) but were taken on grounds of national security.
The WTO panel, once constituted, will now take a call on whether India was justified in imposing unilateral duties on American products in response to Washington’s penal duties on its aluminium and steel. Interestingly, India too has filed a case against the US for its duties on alunimium and steel.
India’s increase in import duties for certain American products is relatively substantial. While import duty on walnut has been hiked to 120 per cent from 30 per cent, duty on chickpeas, Bengal gram (chana) and masur dal were raised to 70 per cent, from 30 per cent. Import duty on lentils was increased to 40 per cent.
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