India appeals against recent WTO ruling on steel exports by Indian companies

India has opposed a recent ruling passed by the World Trade Organisation (WTO) in a case related to imposition of penal duties by the US on steel exports by Indian companies. India has filed an appeal against the ruling. Though the report of the dispute panel favoured India in its stance that the US’ determination of Countervailing Duties (CVD)—a levy to neutralize Government subsidies — on high grade iron ore violated WTO norms but the international body rejected a number of objections raised by India on specific technical issues related to how penal duties are to be estimated.
In its appeal India has asked for revisiting the panel’s decision to reject the objections it has related with the US method of calculating countervailing duties. It is worth mentioning that the US have been imposing CVD ranging from 18% to 500% on carbon steel from India for more than a decade. The high duties have badly impacted Indian steel companies such as Tata and Jindal reducing Indian exports of the product to almost zero.
The US imposes the CVD on the ground that iron ore sourced by Indian steelmakers from public sector NMDC is supplied at subsidised rate because it is government-owned. India rejects this claim and argues that NMDC always sells at the prevailing market prices which are determined by their exports to Japan and South Korea.
The WTO also ruled in India’s favour in the way it decided to define a ‘public body’. However, the WTO rejected a number of Indian challenges which included challenges to over 300 instances of the use of ‘facts available’ and challenges to the US’ benchmark calculations and inclusion of new subsidy programmes in CVD review proceedings.
CVD are imposed on goods to counter export subsidies and prevent dumping and as per the 1964 Marrakesh Agreement. US imposed CVD on India’s exports of hot rolled carbon steel flat products involving steelmakers like Tata, Jindal and Essar who are supplied ore by the state-run iron-ore mining firm, NMDC. In the meantime, the government is also conducting an evaluation all other products of Indian origin on which the US has exercised the same provision to calculate CVD.



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