U.S. and EU Impose Countervailing Duties on Indian Goods

15 Dec 2023

Context: U.S. and the European Union have imposed countervailing duties (CVDs) on four Indian products, in counter to India’s Remission of Duties and Taxes on Export Products (RoDTEP) scheme. 

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  • Affected Product: 
    • U.S Measure: Paper file folders, common alloy aluminum sheet, and forged steel fluid end blocks.
    • EU Measure: Certain graphite electrode systems
  • Earlier, in 2020, the US had removed from a list that gave India preferential treatment by imposing relaxed standards during CVD investigations. This made imposing CVD on Indian products easy. 

What is Countervailing Duty?

  • Countervailing Duty (CVD): These are tariffs imposed by the country on imported goods to offset subsidies provided by the home country to the producers of these goods.  
  • Purpose: Countervailing Duty islevied by the importing country to level the playing field between the producers in the foreign country and the domestic country, taking the subsidies in note provided by the foreign country. 
  • WTO Regulations on Countervailing Duties: The WTO only permits countervailing duties to be charged after the importing nation has conducted an in-depth investigation into the subsidized exports.
  • Mechanism in India: Countervailing measures in India are administered by the Directorate General of Trade Remedies (DGTR), in the Department of Commerce , Ministry of Commerce and Industry.

What is RoDTEP Scheme?

  • It is a duty and tax remission scheme by the Government of India, which is a successor to the Merchandise Export from India Scheme (MEIS), and is being implemented from 1st Jan 2021. 
  • Objective: Its objective is to provide support to the exporters by providing a reimbursement of taxes, duties and levies on the exported product, which are currently not being refunded under any other mechanism, and thus become embedded in the export. 
  • Duration: The scheme has been extended till 30th June 2024 to maintain the competitiveness in the export market. 
  • WTO Compatibility: The scheme is WTO compatible and is being implemented in an end-to-end IT environment. 
  • Financial Allocation:  For the Financial Year 23-24, a budget of Rs 15,070 crores is available to support this scheme. 

Source: The Hindu

 

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