India and European Union (EU) will discuss steel imports safeguard barrier extension at the World Trade Organisation (WTO) on Friday, according to media reports. The EU has proposed to extend the barrier for three years and India is seeking an explanation.
The extended barriers would be effective from June 30 and affect Indian metal exports.
As part of the safeguard measure, a tariff-rate quota (TRQ) will be applied per product class with a 25pc added import responsibility.
As of now, India isn’t exempted from this tariff list and that will hurt Indian exporters.
Indian metal producers have sought bloc compensation in line with WTO guidelines in case of extension-related losses.
India wants to evaluate the move according to Article 12.2 regarding trade harm, by consulting with the EU, according to India’s submission in WTO.
India exported 10.78 mn mt metals in 2020-21, a 29.1pc rise compared to the previous year. In Q1 FY21, India’s metal exports to Spain, Italy, and Belgium were particularly strong as domestic demand went down due to COVID-19 restrictions.
In July 2018, the EU launched metal safeguard TRQs on 26 product classes with 25pc obligation, which is ending on June 30 this year.
The EU is trying to protect its trade with the TRQs so that US tariffs don’t prompt a diversion of commerce flows.
With the extension of the TRQs till June 30, 2024, Indian metal producers will lose the profitable market in Europe as costs will increase.
New safeguard duties will turn gadgets uncompetitive. India is likely to seek increase in TRQ allowance to remain competitive in the EU metal market.