EU drops plan to drag India to WTO

Oct 26: The European Union (EU) has dropped for the time-being its proposed move to drag India to the World Trade Organisation (WTO) on t...

Oct 26: The European Union (EU) has dropped for the time-being its proposed move to drag India to the World Trade Organisation (WTO) on the issue of four per cent additional import duty introduced in the Budget this year.

"We are waiting for some additional information agreed to be provided by India regarding the four per cent additional duty. After we get the information we will analyse the situation and consider what further action to be taken," an EU official said.

"Till then we will not take any action," the official said after the conclusion of the second Indo-EU joint sub-commission meeting on trade and economic cooperation, which ended in the Belgian capital over the weekend.

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He said the European Commission got some "explanation" from the Indian delegation during the Brussels meeting on the reasons behind the additional duty.

Additional secretary in the commerce ministry Nripendra Misra led the Indian delegation at the two-day meeting. The Brussels meeting provided the first opportunity for EUto take up with India formally the additional duty issue.

The official said the 15-nation EU hoped that bilateral consultations would convince New Delhi to roll back the duties.

"But, if the additional information takes an unduly long time, then we may have to look into this issue afresh," the official said.

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The EU had planned to formally complain to the WTO within weeks after its preliminary study of the Budget found a number of "violations" of the import tariff commitments made by India in the WTO agreement for the current financial year.

The strategy to press India to withdraw the additional levy on goods, where duties were higher than those permitted by the WTO, envisaged first moving the trade committee of the WTO and then take the matter to the dispute settlement body (DSB).

The EU study is reported to have found around 200 items on which the final duty, after four per cent additional duty, exceeded the limits imposed by the WTO agreement to which India is a party.

The report was alsoexamined by senior EU officials in-charge of trade matters for further action.

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The EU official said the Indian and EU delegations had "useful" discussions covering a wide range of issues including anti-dumping duties, restrictions by India on exports of hides and skins, India’s TRIMs (trade-related investment measures) commitments, information technology related matters and electronic commerce.

An Indian official said the parleys also covered EU’s future projects in India.

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