Ministries of mines, steel and the department for promotion of industry and internal trade (DPIIT) will set up an internal mechanism to monitor the export of steel and aluminium products at concessional duties to the US, an official said.

Indian exports of these products were earlier attracting additional duties in the US, as Washington, in 2018, imposed a 25 per cent import duty on steel products and 10 per cent on certain aluminium products on grounds of national security. In retaliation, India in June 2019, imposed additional customs duties on 28 American products.

The US is now allowing these imports from India without paying the extra 25 per cent and 10 per cent duties in return for New Delhi’s decision to remove retaliatory duties on eight American products like apple and walnut.

The official also said that the two countries have agreed to set up a joint monitoring mechanism to enable domestic exports to America of at least 3.36 lakh tonnes of certain steel and aluminium products in a year without paying extra duties.

The department of commerce has finalised the terms of references with regards to joint monitoring mechanism (JMM) to enable domestic exports of certain steel and aluminium products to America without paying extra duties and the US has conveyed their agreement with the proposed text.

“Ministries of mines, steel and DPIIT have been requested to establish an internal monitoring mechanism to monitor export of steel and aluminium products to the US specifically under US 232 measure,” the official added.

As per the mechanism, officials will meet twice a year to review the arrangements.

If Indian exporters would face any bottleneck or problem, it would be conveyed to the commerce ministry and will be taken up with the US during the meetings of the joint monitoring mechanism (JMM).

During the visit of Prime Minister Narendra Modi in June last year, the two countries decided to remove trade irritants and as part of that, both sides agreed to end six trade disputes at the WTO.

They have mutually resolved those seven disputes and India has decided to remove additional duties on eight US products, including chickpeas, lentils and apples, which were imposed in 2019.

The US, on its part, has agreed to provide greater market access to certain Indian steel and aluminium products, a development which would help increase outbound shipments of these goods. The US has agreed to grant market access to steel and aluminium products under the exclusion process of Section 232 of the Trade Expansion Act 1962.

This market access has restored opportunities for Indian steel and aluminium exporters, which were restricted since June 14, 2018, because of the US 232 measure under which additional duties were levied on steel and aluminium products respectively.

The additional tariffs had impacted USD 1.21 billion worth of India’s exports of steel and aluminium to the US in 2018. The duty burden on exports due to additional US tariffs amounted to USD 241 million.

The US had settled a similar dispute with Canada and Mexico at the end of 2019. While steel and aluminium imports from these countries got exemption from the extra tariffs, called Section 232 tariff, the agreement provided for aggressive monitoring and a mechanism to prevent surges in imports of steel and aluminium.