Tariff war: WTO sets up dispute panel over India's duty hike on 28 American goods

The World Trade Organisation's (WTO) dispute settlement body has set up a panel to examine the US complaint against India which had increased customs duties on 28 American goods last year.

The US in July had dragged India to the WTO by filing a complaint against New Delhi's move to increase customs duties, alleging the decision as inconsistent with the global trade norms.

According to a communication of the Geneva-based WTO, the dispute settlement body has established a panel "to examine the matter referred by the US".

The US had alleged that the additional duties imposed by India "appears to nullify or impair the benefits accruing to the US directly or indirectly" under the GATT 1994.

The General Agreement on Tariffs and Trade (GATT) is a WTO pact, signed by all member countries of the multi-lateral body, aims to promote trade by reducing or eliminating trade barriers like customs duties.

The US had also alleged that the duties imposed by India appears to be inconsistent with two norms of GATT.

It had stated that India does not impose these duties on products originating in the territory of any other WTO member nation.

As per the WTO's dispute settlement process, the request for consultations is the first step in a dispute.

Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation.

After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel.

The US has rolled back export incentives from India under its GSP programme and New Delhi has imposed higher customs duties on 28 American products including almond, pulses, walnut, chickpeas, boric acid and binders for foundry moulds.

The other products on which duties were hiked include certain kind of nuts, iron and steel products, apples, pears, flat rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets.

The duties were hiked as retaliation to the US move to impose the highest customs duties on certain steel and aluminium goods.

India's exports to the US in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favour of India.