No additional US scrutiny of steel, aluminium from India

The US has assured India that a large majority of steel and aluminium products imported from the South Asian country will be excluded from additional processes of scrutiny, commerce minister Piyush Goyal said on Friday.

This is part of the resolution of six out of seven disputes between the two nations at the World Trade Organization (WTO), Goyal said. The development tracks Prime Minister Narendra Modi’s state visit to the US this week, which included meetings with US president Joe Biden and other top government officials.

“They have given us an assurance that at least 70% of all such requests for steel and 80% for all such requests for aluminium application, for products originating from India, will be excluded from additional processes for Section 232,” Goyal said.

Section 232 of the Trade Expansion Act of 1962 authorises the US commerce secretary to conduct comprehensive investigations to determine the effects of imports of any article on its national security.

Mint had on 19 June reported that India and the US are in advanced talks for an out-of-court settlement to resolve major trade disputes at the WTO, and headway is expected soon.

“It’s a package deal, where they (US government) have assured (us) that all the exclusion requests that exporters and importers from the US make—very often there are requests made for exporters for allowing certain products to be exported—will be excluded from under the tariffs of Section 232,” Goyal said. The six trade disputes that will be terminated include three disputes each from the US side and India.

The disputes filed by the US included countervailing measures on certain hot-rolled carbon steel flat products, countervailing measures related to renewable energy sector, and certain measures on steel and aluminium products from India.

Meanwhile, disputes filed by India that are set to be terminated include measures relating to solar cells and modules, additional duties on certain products and other export related measures.

Earlier, the US, in its complaint, had alleged that these “apparent export subsidies” offer financial benefits to Indian exporters, allowing them to sell goods cheaply to the detriment of American workers and manufacturers, in violation of WTO norms that bar subsidies that distort global trade.

This is a very big victory for India and mutually beneficial arrangement for both countries, Goyal said. He added that India continues to seek the restoration of the Generalized System of Preferences (GSP) status that was withdrawn by the US government in 2019.

India was the biggest beneficiary of the GSP status in 2017, with $5.7 billion worth of imports into the US given duty-free status. About 2,000 products including auto parts and textile materials were allowed to enter the US duty-free.

“It (GSP) is a matter for us to pursue and have dialogue. However, the US Congress will have to take the final decision (on this),” Goyal added.

Meanwhile, the commerce ministry-backed Export Credit Guarantee Corporation of India (ECGC) on Friday said it has carried out the expansion of 90% insurance cover for exporters with a credit limit of ₹50 crore, a cover limited to ₹20 crore earlier.

“Earlier, ECGC used to compensate 60% of the export losses incurred by exporters. Last year, ECGC increased the compensation to 90% with an export limit of ₹20 crore, which benefited the small exporters. When 90% of the losses are being compensated, the account becomes an AA count, which lowers the interest rate,” Goyal said.

“From 1 July 2023, the scheme will be extended to accounts that borrow up to ₹50 crore for export purposes,” the minister said.