WTO to set up panel to decide on import duty on steel

The World Trade Organisation (WTO) has decided to set up a panel to resolve dispute between India and Japan on safeguard duty imposed by India on certain categories of steel. India had imposed safeguard duty in September 2015 to protect domestic steel manufacturers. The duty is expected to taper off wholly in March 2018.

Japan, which is the second largest steel producer, had argued that duties imposed by India are against the WTO norms. India had imposed minimum import price and safeguard duty on steel products in order to safeguard domestic producers from unprecedented surge in imports and predatory pricing.

India and Japan have failed to resolve the issue mutually, due to which Japan had sought a WTO panel to be set up to resolve the issue. Both India and Japan have favourable bilateral trade relationships between them and any decision in favour of Japan will be beneficial for that country.

The Indian steel sector has benefitted highly from these duties, leading to record output growth and also emerged as net exporter of steel from net importer in recent times. However, there is uncertainty on how long the industry can avail these protectionist measures to grow.