India, US decide to end six trade disputes at WTO; Delhi to lift retaliatory tariffs

INTERNATIONAL DESK: India and the United States have agreed to end six trade disputes at the World Trade Organisation and New Delhi will also lift retaliatory customs duties on 28 American products.

This is likely to shore up trade between the nations and also help Indian exporters get key tax advantages.

The decisions come amid Indian Prime Minister Narendra Modi’s State Visit to the US at the invitation of President Joe Biden and First Lady Jill Biden.

The US, in 2018, had imposed 25 per cent and 10 per cent import taxes on certain steel and aluminium products, respectively, on grounds of national security. In retaliation, India in June 2019 imposed customs duties on 28 American products, including chickpeas, lentils, almonds, walnuts, apples, boric acid, and diagnostic reagents.

United States Trade Representative Katherine Tai today announced that the United States and the Republic of India have agreed to terminate six outstanding disputes at the World Trade Organization. “India also agreed to remove retaliatory tariffs which it had imposed in response to the Section 232 national security measures on steel and aluminium,” Tai said on Thursday.

It added that these tariff cuts will restore and expand market opportunities for US agricultural producers and manufacturers.

Today’s agreement represents the culmination of intensified bilateral engagement over the last two years, including through the US-India Trade Policy Forum, to deepen our economic and trade ties,” Tai said.

As a result of our work, US agricultural producers and manufacturers will now enjoy renewed access to a critical global market and we will strengthen our trade relationship with one of our closest partners. I look forward to continuing to work with my counterpart, (India’s Commerce and Industry) Minister (Piyush) Goyal, as we identify additional ways to bring our people and our economies together,” she added.

The six disputes include three initiated by India and as many by the US.

These include countervailing measures on certain hot-rolled carbon steel flat products from India, certain measures relating to solar cells and modules, measures relating to the renewable energy sector, export-related measures, certain measures on steel and aluminium products, and additional duties on some products from the US.

According to trade experts, both countries can resolve the disputes on mutually agreed terms and later inform the Geneva-based WTO about the same.

The US had filed a complaint in the WTO about India’s support measures to its export sector under different schemes. In 2019, a WTO dispute panel ruled that India’s export measures are inconsistent with global trade norms.

The US is the largest trading partner of India. In 2022-23, the bilateral goods trade increased to USD 128.8 billion as against USD 119.5 billion in 2021-22.

According to WTO rules, a member country can file a case in the Geneva-based multilateral body if they feel that a particular trade measure is against the norms of the world body. Bilateral consultation is the first step to resolving a dispute. If both sides are not able to resolve the matter through consultation, either of them can approach the establishment of a dispute settlement panel.

The panel’s ruling or report can be challenged by WTO’s appellate body.

Interestingly, the appellate body is not functioning because of differences among member countries to appoint its members. Several disputes are already pending with this body. The US has been blocking the appointment of the members. (ET)