India should drag US in WTO over tariff hike decision, say trade experts

The World Trade Organization WTO logo is seen at the entrance of the WTO headquarters in Geneva (Photo: Reuters)
India should drag the US in the World Trade Organisation's (WTO) dispute mechanism against the move to hike import duties on steel and aluminium, as the decision will impact exports and it is not in compliance with the global trade norms, experts today said.

The decision of the US would not only impact India's export of these goods to America but also affect global trade, Biswajit Dhar, a professor of economics at Jawaharlal Nehru University, said.

"Such decisions are protectionist in nature. India needs to approach the WTO against this move as it would severely hit global trade," Dhar said.

Former Commerce Secretary G K Pillai said the country should take action against America and also raise duties on products like almonds, pistachio and Harley-Davidson motorcycle. The US exports these items to India.

"We also have the freedom to increase tariffs. India should also retaliate as the US decision will impact exports of steel and aluminium goods. You have to take action to protect the country's interests," Pillai told PTI.

He added that raising duties by India would be within the bound rates of the WTO.

These are the rates beyond which, a WTO member can not increase taxes on a commodity.

Exporters body FIEO too said that India should file a complaint in the Geneva-based WTO as the decision of America is not in compliance with the global trade norms.

India's exports of steel and aluminium products to America stood at about USD 1.5 billion every year.

"India has huge trade interest in the US and knee-jerk reaction is not good. We should approach the WTO," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said.

Sharing similar views, former Ficci President and expert on international trade related issues R V Kanoria said that raising duties by America is against the WTO's norms.

"India should refer the case to the WTO," he said.

However, he cautioned that the country should not take any knee-jerk reaction against the US.

Further, Professor at Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said the US decision will impact global trade as other countries too are expected to take such protectionist measures.

"Such decisions impact process of goods in global markets. It would dent competitiveness of goods and India should consider going to WTO's dispute body against this decision," he said.

On March 9, President Donald Trump imposed heavy tariffs on imported steel and aluminium which he said were necessary to boost the US industry suffering from "unfair" business practices, a move that has sparked fears of a global trade war.

Trump signed two proclamations that levied a 25 per cent tariff on steel and a 10 per cent tariff on aluminium imported from all countries except Canada and Mexico.

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