WTO Defends India Against US

The World Trade Organization ruled in favor of India and against the United States on imposing high taxes on steel imports from India. The Indian government has decided to require the United States to remove about seven items from the CVD (Compensation Obligations) provisions, which are the criteria for a steel tax. The World Trade Organization has rejected a steel tax from India, saying it is inconsistent with the provisions of the Agreement on Subsidies and Countervailing Measures.

The US government has used CVD provisions to impose a duty on imports of hot rolled steel in coils for Indian steel producers, including Tata Steel, which is supplied with raw materials from the state-owned iron ore producer NMDC. The tax was imposed on the assumption that the iron ore supplier NMDC allows the steel company to buy iron ore at a lower price, making their products artificially cheaper. At the same time, the NMDC was considered a government agency.

According to the regulations, CVD cannot be assigned to the import of a steel producer if the producer's supplier is a private company. But in the case of Tata Steel, even if NMDC is a state-owned iron ore producer, the company itself does not interfere with state functions and does not have influence over any state bodies. Thus, in accordance with WTO rules, the iron ore company cannot be identified as a source of violations.