INDIA CHALLENGES WTO RULING ON IT TARIFFS: STRATEGIC APPEAL AMIDST APPELLATE BODY IMPASSE

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"Navigating Global Trade Tensions: India's Proactive Move to Safeguard Economic Interests and Domestic Industries"

India is set to contest a ruling by the World Trade Organisation (WTO) panel, challenging the assertion that it breached global trading regulations by imposing tariffs on specific information technology products. The appeal will be directed to the WTO’s appellate body, which is currently non-operational due to certain appointments being blocked by the United States. This impasse effectively means that the ruling against India will not be implemented.

In 2019, the European Union (EU) lodged a complaint against India’s imposition of import duties ranging from 7.5% to 20% on various IT products, including mobile phones, components, and integrated circuits, arguing that these tariffs exceeded the maximum allowable rate. Japan and Taiwan also filed similar complaints in the same year. In April, the WTO panel ruled that India’s import duties violated global trading rules.

Given the continued inactivity of the WTO’s appellate body, analysts believe that India’s appeal is a strategic move to preempt potential retaliatory measures by the EU. Filing a technical appeal prevents the WTO ruling from becoming final and adopted. Abhijit Das, a renowned WTO expert, noted, “As the appellate body would not be in a position to hear the appeal, the dispute is likely to remain in limbo. It is apprehended that the EU might retaliate against India for its decision to appeal into the void.”

The WTO confirmed India’s decision to appeal the panel report in the case initiated by the EU titled “India Tariff Treatment on Certain Goods.” This appeal was officially circulated to WTO members on December 14.

Meanwhile, concerns over increased steel imports have prompted the Indian government to review the situation, responding to anxieties expressed by the domestic steel industry. Steel manufacturers have raised alarms with various ministries, including steel and commerce, regarding a surge in imports from specific countries like China and Vietnam.

In response, the Ministry of Steel convened a meeting on Wednesday to assess the import situation. Chaired by Steel Secretary Nagendra Nath Sinha, the meeting included representatives from various companies and ministry officials who participated in the hour-long discussion.

According to a ministry official, steel producers conveyed to the ministry that there has been a continuous influx of imports from countries such as China and Vietnam, even when identical types of steel are readily available in India. While the official did not specify the steps to be taken, they mentioned that any action could only be initiated after the industry submits relevant details to the ministry.

Additionally, industry representatives suggested several measures during the meeting, including the elimination of certain duty cuts and the establishment of tariff rate quotas, where predefined limits are set for duty-free inbound shipments.

As India navigates these trade challenges, the strategic appeal at the WTO and the scrutiny of steel imports underscore the nation’s commitment to safeguarding its economic interests and domestic industries. The outcomes of these deliberations will play a crucial role in shaping India’s trade policies and relationships in the evolving global economic landscape.

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