South Korea Takes India to WTO Over Steel Curbs

The Economic Times reports that South Korea is mulling a WTO case against India over the latter's recently imposed restrictions on certain steel imports, including some Korean ones. That is, unless Indian firms obtain import licenses, these products cannot be readily imported. Yes, it is reminiscent of times we thought we've left behind when India maintained a formidable barrier of red tape known as the "License Raj":

Late last year, India put a number of items on the restricted list, including steel products like motor vehicle parts, hot-rolled coils and seamless tubes and pipes. This means only the user industry can import these items against licences issued by the government.

But it may be difficult to explain these curbs as they were imposed without any specific reasons, said [an Indian] government official, requesting anonymity. There is already a feeling within the government that it is safer to impose special duties like anti-dumping duties or safeguard duties to check cheap imports as WTO has provisions for these.

The committee of secretaries, headed by the Cabinet secretary, has already decided that import restrictions would be imposed sparingly. Earlier this year, it asked the commerce department to get import curbs vetted by the CoS when it was necessary to impose them...

In its submission to the WTO committee on import licensing, South Korea also wanted to know the steps being taken by India to ascertain that its new licensing scheme does not restrict imports. “What measures are being taken by the Indian government to ensure that the licensing scheme does not have import restrictive effects, irrespective of whether the licensing scheme concerned is automatic or non-automatic as required in the (WTO) agreement?” states a submission made by the delegation of South Korea at WTO.

The global economic downturn has resulted in a sharp fall in international steel prices, forcing India to look at various options to protect its domestic industry.

The offending action by India is reminiscent of that taken against Chinese toys [1, 2, 3]: issue restrictions largely without explanation. From a famously verbose culture, the silence is deafening. With India's marathon elections in progress, the political-economic payoff is yet to be decided for the Congress Party's actions on toys and steel.