Japan Drags India to WTO on Steel MIP

· Alleges Nullification of Concessional Duty on 29 Lines in Steel Chapter under Bilateral FTA

· India Substitutes MIP with Anti-Dumping and Safeguards to Protect Domestic Industry

Japan dragged India to the World Trade Organisation (WTO) against certain measures taken by New Delhi on imports of iron and steel products.

“On December 20, Japan notified the WTO Secretariat that it had requested dispute consultations with India in the dispute ‘India-Certain Measures on Imports of Iron and Steel Products’,” the WTO has said.

India has imposed minimum import price (MIP) on imports of certain iron and steel products. (These are violative of WTO rules as the Agreement on Customs Valuation specifically forbids this practice. India has used this as a temporary measure which can be withdrawn quickly if and when the affected country moves against the trade restricting measure).

In February, India imposed MIP of 173 products for six months, which was later extended twice for two months. The government extended MIP on 19 products till February 4, 2017 by which time the so called WTO compliant measures will be in place.

India has imposed MIP as growing imports from steel surplus countries like China, Japan and Korea with predatory prices have been a major concern for the domestic industry since September 2014.

As Japan has filed the case, it will do bilateral consultations with India on the issue.

As per the WTO’s dispute settlement process, the request for consultations is the first step in a dispute.

Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation.

After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel.

India and Japan implemented a comprehensive free trade agreement in 2011. It gave easy access to Japan in the Indian steel market. Indian industry has time and again demanded to take out the steel sector from the pact. But it can happen only after both the sides agree to do the same. (Ref: BIG’s Easy Reference Customs Tariff Country Preferences Section for Text of Notification).

The bilateral trade between the countries stood at $14.51 billion in 2015-16. Trade is highly in favour of Japan.

India exports, specially textiles, have gained substantially from the Agreement with Japan.