Japan took steel imports issue to WTO:
Japan has dragged India to the World Trade Organisation (WTO) against certain measures taken by New Delhi on imports of iron and steel products.
India and Japan implemented a comprehensive free trade agreement in 2011. It gave easy access to Japan in the Indian steel market. Indian industry has time and again demanded to take out the steel sector from the pact. But it can happen only after both the sides agree to do the same.
The bilateral trade between the countries stood at $14.51 billion in 2015-16. Trade is highly in favour of Japan. India has imposed minimum import price (MIP) on imports of certain iron and steel products. The government extended MIP on 19 products till February 4, 2017.
According to the commerce ministry sources, WTO-compliant measures like anti-dumping duty should be used to overcome the issue of cheap imports of commodities like steel as MIP is not compliant with the global trade norms.
India has imposed MIP as growing imports from steel surplus countries like China, Japan and Korea with predatory prices have been a major concern for the domestic industry since September 2014. India has also imposed anti-dumping duties on certain steel products to guard domestic players from cheap imports.
WTO’s Dispute Settlement Process:
1. As per the WTO’s dispute settlement process, the request for consultations is the first step in a dispute.
2. After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel.
What is Minimum import price?
MIP (Minimum Import Price) is the minimum price per tonne that Indian firms have to pay while importing products into India.
For instance, The Govt. of India on February 5, 2016 had imposed the MIP on steel ranging from $341 to $752 per tonne on 173 steel products. This can be seen as government's policy of promoting domestic growth of steel manufacturing industry and restricting and reducing dependence on externally manufactured steel products. (Without MIP, Indian importers would be able to import more steel since internationally the cost of steel is low owing to slow economic growth worldwide.) However WTO (World Trade Organisation) is not happy with such measures which restrict international trade.