India informed the World Trade Organization (WTO) that it has chosen to apply retaliatory measures against the European Union's (EU's) steel tariffs, which have been in place since 2018 and have been extended until June 2026.
The decision comes after bilateral talks with the trade group were unsuccessful earlier this year. While India did not disclose the specifics of its retaliatory actions, it did state that it will "increase tariffs on select products originating in the EU."
Over a five-year period, the application of these tariffs has hurt India's exports by around $4.4 billion, while the EU has collected import duties of $1.1 billion.
India is now asking permission to apply a comparable level of tariff on goods originating in the EU.
"India hereby announces that from 2018 to 2023, the safeguard measures resulted in a cumulative trade loss for India of $4.412 billion, of which duty collection would be $1.103 billion. As a result, India told the WTO on Thursday that its planned suspension of concessions would result in an equal amount of tax collected from EU-originating imports.
"India reserves the right to implement the proposed suspension immediately and adjust the products and tariff rates," New Delhi stated, adding that it will notify the WTO of the next relevant actions.
A provisional protection measure on imports of certain steel goods was first implemented in 2018 for 26 different steel kinds. The safeguard measure took the form of a tariff rate quota, with any steel that exceeded the limit subject to a 25% extra tariff.
The goal was to 'avoid economic damage' to EU steel companies amid rising global steel overcapacity and a boom in shipments from China via Asian nations to the trading bloc.
While the measure was scheduled to stay in force until June 2021, it was eventually extended until June 30, 2024. Three months ago, the EU extended protective taxes on steel imports until June 2026.
Under WTO regulations, such safeguard measures can only remain in force for a maximum of eight years, which in this case is until June 2026.
India has opposed the renewal of steel tariffs. They have been in bilateral negotiations with the EU, arguing that the restrictions were previously deemed inconsistent with WTO principles by a dispute settlement tribunal.
Assessing the Influence
> Over a five-year period, $4.4 billion of India's exports have been harmed.
> The European Union has collected $1.1 billion in import tax owing to the application of tariffs. > India has announced it will apply a similar amount of charge on goods originating from the EU.
