India has said that the World Trade Organization’s Appellate Body ruling against penal duties imposed by the US on Indian steel is a major victory as it will also allow it to challenge similar duties imposed on other products.

The ruling has come as a relief for major steel producers such as Essar, Jindal and Tata, which had almost stopped exporting ‘hot-rolled carbon steel flat products’ to the US in the face of steep anti-subsidy duties (called countervailing duty or CVD), which were as high as 577 per cent in some cases.

“The ruling is crucial for the Indian steel industry and will help in enhancing India’s steel exports to the US. The Government should now look at similar CVD on other items,” said Anupam Shah, Chairman, The Engineering Export Promotion Council.

The Commerce Ministry has already started the process of identifying such items. “The items that could benefit from the ruling include at least six other steel items, such as steel nails and steel thread rods, PET and some chemicals,” a Commerce Ministry official told BusinessLine , adding that it had a significant trade implications.

Although the WTO’s dispute settlement panel had already ruled in July this year that the CVD imposed on hot-rolled steel from India flouted global trade rules, it had maintained that NMDC, which supplied steel to Indian companies, was a public body.

“This had disappointed India as it meant that all PSUs in future disputes at the WTO would be considered as public bodies liable of selling raw materials at subsidised rates. It thus complained to the WTO Appellate Body against the ruling,” the official explained. The Appellate Body, on Monday, overturned the WTO Panel Report’s suggestion that NMDC is a public body on the ground that it did not have governmental authority or discharged governmental functions.

“The ruling also has worldwide implications on how the WTO disciplines on subsidies can be applied against alleged financial contributions from State-owned enterprises,” an official release said.

The Dispute Settlement Body (DSB) is now expected to meet on December 19, when it will adopt the Appellate Body report. The US and India will then meet to decide on how the country plans to implement the WTO’s decision.

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