India Proposes Retaliatory Customs Duties on EU Steel Products Amid Trade Disputes

India has announced plans to impose retaliatory customs duties on certain EU imports under WTO guidelines. This move comes after both parties failed to agree on the EU's safeguard measures for some steel products. India communicated to the WTO that it intends to increase tariffs on selected EU-origin products, reflecting a trade loss of USD 4.412 billion from 2018 to 2023 due to these measures.

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The EU's safeguard duties on specific steel imports, initially imposed in 2018, have been extended until 2026. This extension affects India's significant steel export interests in the EU market. In response, India plans to collect equivalent duties from EU products, amounting to USD 1.103 billion. The country reserves the right to adjust tariffs and product lists as needed.

Impact on Trade Relations

India has informed the WTO's Council for Trade in Goods and the Committee on Safeguards about its decision to suspend concessions under GATT 1994 and the Agreement on Safeguards. This suspension is equivalent to the trade impact caused by the EU's measures. The EU had notified the WTO of its intention to extend these safeguards on May 29, 2024.

In 2023-24, India's iron and steel exports to the EU rose to USD 6.64 billion from USD 6.1 billion in the previous year. Despite this growth, India has expressed concerns at the WTO over the EU's extension of safeguard duties until 2026, arguing it violates global trade rules and the WTO's Agreement on Safeguards.

Consultations and Concerns

India and EU officials have held bilateral talks but failed to reach a consensus. The EU's actions follow similar US measures during the Trump administration, which imposed additional duties on steel imports. According to WTO rules, if no agreement is reached within 30 days of consultations, India can suspend concessions equivalent to the adverse effects of these measures.

In 2019, India sought consultations with the EU under WTO auspices against safeguard duties on certain steel products. These consultations were based on the WTO's Agreement on Safeguards. India's concerns also stem from exporting nearly 6% of its steel output to Italy, an EU member.

Previous Retaliatory Measures

In a related issue in 2022, India proposed a 15% customs duty on imports of 22 UK products, including whisky and cheese, in response to UK restrictions on steel products. The WTO, a Geneva-based body with 164 members, sets rules for global trade and resolves disputes among nations.

India is negotiating a free trade agreement with the EU to enhance trade and investment relations. In 2023-24, India's exports to the EU increased by 1.5% to USD 76 billion, while imports decreased by about 3% to USD 59.38 billion.

India remains committed to protecting its trade interests while seeking amicable solutions through negotiations and consultations with international partners.