India resolved to take retaliatory action against the European Union's (EU) steel tariffs, which have been in place since 2018 and have been extended until June 2026, and notified the World Trade Organization (WTO) of its decision.
The action was taken following the previous year's failure of bilateral engagements with the trade bloc.
Although it withheld the specifics of the retaliatory actions, India declared that it would "increase tariffs on select products originating in the EU."
The introduction of these tariffs has cost the EU $1.1 billion in import duties over a five-year period, impacting India's exports worth approximately $4.4 billion.
India is currently requesting permission to charge the same level of tariff on goods coming from the EU.
“India hereby informs that from the year 2018 to 2023 the safeguard measures have resulted in cumulative trade loss for India to the tune of $4.412 billion, on which the duty collection would be $1.103 billion. Accordingly, India's proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the EU,” India told the WTO on Sep 19.
“India reserves its right to effectuate the proposed suspension immediately and adjust the products as well as the tariff rates,” Union said, adding that it will inform the WTO on the next appropriate steps.
A temporary safeguard measure was initially put in place on imports of 26 different types of steel in 2018.
The protective measure was implemented as a tariff rate quota, with an additional 25% tariff applied to any steel that exceeded the quota.
Amidst a spike in Chinese shipments via Asian countries to the trade bloc and a high level of global steel overcapacity, the goal was to "prevent economic damage" for EU steel producers.
The measure was originally scheduled to take effect until June 20, 2021; however, it was then extended until June 30, 2024.
The EU extended safeguard taxes on steel imports until June 2026 three months ago.
Such safeguards can only be implemented for a maximum of eight years, or until June 2026 in this instance, in accordance with WTO regulations.
India has been against the tariffs on steel being extended. They have been engaging in bilateral negotiations with the EU to make the case that a dispute resolution body has already determined that the measures violated WTO standards.
India's exports worth $4.4 billion have suffered during the last five years. As a result of the tariffs, the European Union has received $1.1 billion in import duties.
India declared that it will charge the same level of duty on goods coming from the European Union.
