India drags US to WTO over duties levied on steel exports

India has dragged the US to the World Trade Organization (WTO) over the issue of import duties levied on certain Indian steel products. It has sought consultations with the US under the WTO's dispute settlement mechanism on the countervailing duties (CVD) imposed on steel. The move has come after the informal consultations with the US failed to yield result.

Countervailing duties (CVD) are imposed by the government of a country to neutralise the subsidies on products given by the exporting nation. The US has been imposing CVD on steel exported by Indian companies in the range of 18-500%. It has also imposed anti-dumping duties, a penal levy on imports that are sold at higher prices in the home market of the exporter, of over 20%.

India has challenged the assumption made by US Department of Commerce that the iron ore sourced by Indian steel makers from NMDC is supplied at subsidised rate as it is a government body. India has argued that this is a wrong assumption as NMDC always sells at the prevailing market prices which is determined by their exports to Japan and South Korea.

The move comes just a few weeks after the US sought similar consultations with India over the import ban imposed by the country on poultry and poultry product imports because of the bird flu scare. The US had termed the ban as ‘unjustified’ health-safety worries. India also has plans of filing a formal complaint with the WTO over the professional visa fee hike carried out by the US.

Consultations in the WTO give the concerned parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.