Govt To Set Up Internal Mechanism To Oversee Steel, Aluminium Product Exports At Concessional Rates To US

Both India and the US have agreed to set up a joint monitoring mechanism to allow domestic exports to the US of certain steel and aluminium products in a year without having to pay the surplus duties

While the steel and aluminium imports from these nations received exemption from the extra tariffs, known as Section 232 tariff, the agreement calls for aggressive monitoring and a mechanism to avoid surges in steel and aluminium imports.

Source : Getty

The Ministries of Mines, Steel, and the Department for Promotion of Industry and Internal Trade (DPIIT) plan to establish an internal mechanism to oversee the export of steel and aluminium products at concessional duties to the US, an official said. 

Earlier, Indian export of these products attracted extra duties in the US, after Washington imposed a 25 per cent import duty on steel products and 10 per cent on aluminium products in 2018, citing grounds of national security. In retaliation in 2019, India levied additional customs duties on 28 American products. Currently, the US is permitting these imports from India without the payment of the extra 25 per cent and 10 per cent duties in return for India to remove the import duties on 8 American products including apple and walnut, reported PTI.

The news agency quoted the official and said that the two countries have together agreed to establish a joint monitoring mechanism to allow domestic exports to the US of at least 3.36 lakh tonne of certain steel and aluminium products in a year without having to pay the surplus duties. 

The official further noted that the commerce department has finalised the terms of references with regards to the joint monitoring mechanism (JMM) to allow domestic exports of select steel and aluminium products to the US without having to spend on the extra duties and the US has expressed its agreement with the suggested text. 

The ministries of mines, steel, and the DPIIT have been urged to set up an internal monitoring mechanism to oversee the export of steel and aluminium products to the States, specifically under US 232 measure, the official added. 

According to the mechanism, the officials would convene twice a year to review the arrangements. If Indian exporters face any issues, it would be communicated to the commerce ministry and will be presented to the US during the meetings of the JMM. 

During Prime Minister Narendra Modi’s visit in June 2023, both the nations decided to remove trade obstructions, and as part of that, they agreed to end six trade disputes at the WTO. They mutually resolved the disputes and India agreed to let go of the additional duties on 8 US products, including chickpeas, lentils, and apples.

The US also agreed to give greater market access to select Indian steel and aluminium products, which would help increase the outbound shipments of these goods. This market access also helped restore opportunities for Indian steel and aluminium exporters, earlier restricted due to the duties imposed. 

The additional tariffs affected Indian steel and aluminium exports worth $1.21 billion in 2018. The duty burden on exports due to additional US tariffs amounted to $241 million. Earlier by 2019 end, the US also settled a similar dispute with Canada and Mexico. 

While the steel and aluminium imports from these nations received exemption from the extra tariffs, known as Section 232 tariff, the agreement calls for aggressive monitoring and a mechanism to avoid surges in steel and aluminium imports.