New Delhi: India has proposed a significant retaliation against the European Union (EU), aiming to recover $1.1 billion in response to the EU’s safeguard duties on Indian steel exports. This move is a key development in the ongoing India-EU conflict over trade measures and follows several rounds of unsuccessful bilateral discussions, with India seeking to protect its economic interests.
The proposed action was communicated to the World Trade Organization (WTO), where India outlined its intention to either impose additional duties on imports from the EU or withdraw trade concessions provided to the 27-member bloc. According to India, these countermeasures are necessary due to the financial losses caused by the EU’s trade restrictions.
In its submission to the WTO, India stated that the EU’s safeguard duties have resulted in a cumulative trade loss of $4.412 billion for India from 2018 to 2023. Consequently, India proposes collecting $1.1 billion in duties from EU companies to balance the impact.
The EU’s safeguard measures, which were first imposed in 2018, have been extended twice, most recently in June 2023, and are now set to continue until 2026. These measures, implemented under the Tariff Rate Quota (TRQ) system, limit the quantity of steel products that each country can export to the EU without incurring extra tariffs. India, being one of the major steel exporters to the EU, has been particularly affected by this system. Under the TRQ mechanism, if steel exports exceed the set quota, they are subject to an additional 25% duty.
Last year, India exported $6.64 billion worth of iron, steel, and related products to the EU, marking an increase from $6.1 billion the previous year. The ongoing safeguard duties, however, threaten to disrupt this key trade relationship, prompting India’s proposed retaliation.
India has also reserved the right to immediately implement its proposed suspension of trade concessions and adjust the tariffs or products involved, based on future developments. The move marks an escalation in the trade dispute between the two major economic powers, with both sides keenly watching how the situation unfolds.
SCOPE | Solar Rooftop Panels Market: Growth and Future Outlook
