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Commerce Ministry Initiates Effort to Assist Indian Exporters in Dealing with US Countervailing Duty Cases

Published: December 21, 2023
Author: TANVI_MUNJAL

The Commerce Ministry of India has launched an exercise to provide support to Indian exporters in maintaining proper documentation for handling countervailing duty cases on domestic products in the United States, according to an official. To achieve this objective, teams from both the Directorate General of Foreign Trade (DGFT) and the Directorate General of Trade Remedies (DGTR) have collaborated to develop a roadmap for the necessary documentation procedures for Indian exporters.

Countries impose countervailing duties after thorough investigations on products suspected to be subsidized for export purposes by their trading partners. Fostering subsidized exports is considered an unfair trade practice. Imposing countervailing duties is permissible only when importing countries’ investigating agencies confirm that the imports of the specific products are subsidized and cause harm to the domestic industry. This measure does not aim to prohibit or restrict imports but rather fosters a fair playing field for domestic players, as permitted by the World Trade Organisation (WTO).

The United States has already completed countervailing investigations and submitted final determinations on three Indian products: paper file folders, common alloy aluminium sheets, and forged steel fluid end blocks. Similarly, the European Commission conducted a parallel probe on certain graphite electrode systems from India. In response to the subsidy allegations against various government programs and schemes at both the central and state levels, the Indian government and affected exporters have vigorously defended themselves during the investigation process.

The imposition of countervailing duties necessitates a reasonable and robust system for verifying inputs, consumption amounts, and indirect taxes imposed. The investigating authorities in the US have highlighted the need for a highly technical report during the investigation process. To address this requirement, the commerce ministry, in partnership with the DGTR, has initiated efforts to educate and sensitize exporters on the essential documentation needed to satisfy the investigating authorities in the US.

To ensure compliance, the DGFT recently held a meeting with the DGTR to discuss the issue further. A comprehensive roadmap outlining the specific documentary requirements for Indian exporters is being developed to enable exporters to present the necessary documents to the investigating authorities. Additionally, the Indian authorities will conduct random test checks to ensure adherence to the established guidelines. The commerce ministry’s proactive approach aims to support Indian exporters and enhance their ability to navigate countervailing duty cases effectively.

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