Indian Steel Industry to Gain from WTO Ruling

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Researched by Industrial Info Resources India (Delhi, India)--In a major relief to the Indian steel industry, the World Trade Organization (WTO) has ruled against the United States imposing high duty on import of certain Indian steel products, an order hailed by India as a "significant victory" that will help domestic manufacturers and exporters.

The Appellate Body of the World Trade Organization (WTO) has ruled that the Countervailing Duty (CVD) imposed by the US on the import of hot-rolled carbon steel flat products is inconsistent with various provisions of the Agreement on Subsidies and Countervailing Measures (ASCM).

The move is likely to help domestic manufacturers who had been suffering due to the duty imposed by the US Department of Commerce. The implication of this ruling is that the US has to amend its domestic law to be WTO compliant.

"It has significant trade impact for India as out of the current 10 products on which US has imposed CVD, about seven products suffer from the same inconsistency," said an official statement.

This ruling is likely to provide relief to exporters who buy raw materials from state-run steel producer such as Steel Authority of India Limited (SAIL) (BSE: 500113) (New Delhi) and NMDC Limited (BSE: 526371) (Hyderabad). The ruling also has world-wide implications on how the WTO disciplines on subsidies can be applied against alleged financial contributions from state-owned enterprises.

The statement said that India will actively monitor the implementation of this ruling by the US in order to ensure that interests of Indian exporters are fully protected. "India's efforts in this dispute showcase its commitment to ensuring a level playing field for its industry," it further added.

After India filed its complaint at the WTO in 2012, the dispute settlement panel of the body had ruled in India's favor against the USA's imposition of higher duties on New Delhi's steel imports. Both the countries challenged panel's ruling and approach Appellate Body of the WTO.

As per reports, Washington has imposed duties of about 300% on these products imports. The US had imposed the higher duties on steel imports from India arguing that some domestic companies were being indirectly subsidized by the Indian government.

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