WTO rules against India’s decision to impose safeguard duty on steel from Japan

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In a set back to India, a dispute settlement panel at the World Trade Organization (WTO) upheld Japan’s complaint that the safeguard duty India imposed on import of hot-rolled steel flat products violated core global trade rules.

The verdict of the three-member panel on Tuesday was on the duty — ranging from 10% to 20%  — that India imposed during different periods between 2015 and 2018.

Under WTO rules, a country is allowed to impose safeguard duties to curb unforeseen surges in imports that affect their domestic industries. But it has to show hard evidence that there was a sudden and sustained spike in imports that harm domestic industry and stick to the WTO rules regarding this.

Countries such as the US, Australia, China, the EU, Indonesia, Kazakhstan, South Korea, and Russia, joined as third parties in the dispute.

The panel ruled that India failed to “demonstrate that the unforeseen developments and the effect of GATT (General Agreement on Tariffs and Trade) obligations resulted in an increase in imports”.

If India does not appeal` against it in the appellate body, the decision will be adopted by the dispute settlement body within 20 to 60 days of circulation.

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