Japan, Europe against India’s ‘safeguard’ probes on steel imports

11 May 2015

The EU and Japan have criticised India for “frequent and frivolous” use of safeguard measures — imposition of higher duties to protect domestic industry against import surges — and have asked New Delhi to review its use of the tool.

The countries also questioned India’s recent safeguard investigation on certain steel products, in a recent meeting of the WTO’s Committee on Safeguards.

“The EU has alleged that many of the investigations have been initiated on weak grounds and asked India to review its use of safeguard measures,” an official who attended the meeting told Business Line.

Of the total 30 safeguard actions notified by countries at a recent meeting of the WTO’s Committee on Safeguards, India accounted for five, but later dropped two.

In 2014, too, safeguard investigations initiated by India were one of the highest at 14.

Japan, the EU and Russia expressed concerns about India’s safeguard investigation on seamless pipes, tubes and hollow profiles of iron or non-alloy steel, arguing that imports had not surged.

India, in its defence, said that while imports had decreased, they were still sufficiently high compared to the base year. A number of members, including the US and China, are affected by duties on steel products.

Safeguard duties, which are basically levies in addition to the existing import duties, can be imposed on items that witness a surge in imports, thereby hurting the domestic industry.

Easy to establish

India has been depending more on this measure to protect its domestic industry as it is easy to establish. Imposing anti-dumping duty, which is the other form of penal duty that the WTO allows, is more difficult as one has to prove that the imports are actually happening at prices lower than what is being charged in the seller’s home country.

“India is very careful that all conditions laid down by the WTO are met before safeguard duties are imposed. It abandons a lot of investigations when there is room for doubt,” a Commerce Ministry official said.

India announced at the meeting that it had terminated its safeguard investigation on cold rolled flat products of stainless steel. Japan welcomed the announcement but said it still has systemic concerns about India’s safeguard investigations.

The country also announced termination of its safeguard investigation on slabstock polyol, used in manufacture of pillows and mattresses. It is mostly imported from the US and Japan.