What Happened
- Japan and South Korea formally raised concerns about India's regulatory measures affecting their steel companies during an interactive session hosted by India's Ministry of Steel ahead of the Bharat Steel 2026 event
- Japan flagged difficulties with India's Quality Control Orders (QCOs) for intermediate steel products, noting that even where final products are already certified, QCOs require additional certification for inputs — creating a dual-compliance burden
- Japan also raised issues caused by anti-dumping duties on coke exports to India, which impact Japanese steel producers' cost structures
- South Korea raised similar concerns about QCOs and other import restrictions limiting market access for Korean steelmakers
- India had earlier granted exemptions to 72 overseas integrated steel plants — including South Korea's POSCO and Hyundai Steel, and Japan's JFE and Nippon Steel — from new steel input quality rules, but broader concerns persist about the direction of India's steel trade policy
Static Topic Bridges
Trade Remedies: Anti-Dumping, Safeguard Duties, and Quality Control Orders
India's trade policy toolkit for protecting domestic industries includes three principal mechanisms. Anti-dumping duties are imposed when foreign goods are found to be exported at below-normal value, injuring domestic industry — governed by the Customs Tariff Act 1975 and WTO Anti-Dumping Agreement. Safeguard duties are temporary tariffs imposed when import surges threaten domestic industry, governed by the WTO Agreement on Safeguards. Quality Control Orders (QCOs) are technical standards imposed on products requiring mandatory Bureau of Indian Standards (BIS) certification — their primary stated purpose is consumer/safety protection, but their trade-restrictive effect has drawn WTO scrutiny. India has issued over 732 QCOs since 2014.
- Anti-dumping investigations in India are conducted by the Directorate General of Trade Remedies (DGTR)
- WTO Anti-Dumping Agreement (Article VI of GATT): allows remedial tariffs if dumping causes material injury
- WTO Agreement on Safeguards: permits temporary tariffs on import surges, subject to time limits and compensation obligations
- QCOs require BIS certification before goods can be sold in India — applies to both domestic and imported products
- India has been a heavy user of anti-dumping duties globally; China is the most frequent target
Connection to this news: Japan's objection to QCOs on intermediate steel inputs exemplifies how non-tariff barriers (NTBs) — particularly standards-based measures — create trade friction even when formal tariffs are low, a tension that WTO disciplines under the TBT Agreement struggle to fully resolve.
India's Steel Industry: Structure, Policy, and China Factor
India is the world's second-largest steel producer (after China), with an annual capacity exceeding 160 million tonnes and a target of 300 million tonnes by 2030 under the National Steel Policy 2017. The domestic steel industry has faced competitive pressure from cheap Chinese steel exports, which have surged globally as China's real estate sector contracted and excess capacity sought export outlets. India's steel import restrictions — QCOs, anti-dumping duties, and the 12% safeguard duty on flat steel extended in 2024 — are primarily designed as shields against this Chinese steel flood, but they inevitably affect all steel exporters including Japan and South Korea.
- India is the world's 2nd largest steel producer; China produces ~50% of global steel
- National Steel Policy 2017: targets 300 million tonnes capacity and $1 trillion investment by 2030
- India extended safeguard duties on flat steel imports for 3 years (2024)
- China's steel overcapacity: estimated 150-200 million tonnes of excess capacity seeking global export markets
- Japan (JFE, Nippon Steel) and South Korea (POSCO, Hyundai Steel) are major high-quality steel exporters to India
Connection to this news: India's dilemma is structural — it needs Chinese steel kept out to protect domestic producers, but blunt instruments like QCOs and broad safeguards catch high-quality Japanese and Korean steel in the same net, straining bilateral trade relations with important partners.
WTO Dispute Settlement and India's Trade Obligations
India is a founding member of the WTO (1995) and is bound by its Agreements on Goods (GATT), Services (GATS), and intellectual property (TRIPS). The WTO's dispute settlement mechanism — the Dispute Settlement Body (DSB) — allows members to challenge measures that violate WTO commitments. India has been both a complainant and respondent in numerous WTO disputes. Trade restrictions must be consistent with GATT Article III (national treatment), Article XI (no quantitative restrictions), or justified under Article XX exceptions (health, safety, environment). QCOs can be challenged under the WTO Agreement on Technical Barriers to Trade (TBT Agreement) if deemed more trade-restrictive than necessary.
- India has been party to 175+ WTO disputes (as of 2025) — both as complainant and respondent
- TBT Agreement: members can impose technical regulations for legitimate objectives (safety, environment) but must ensure they are no more trade-restrictive than necessary
- WTO Appellate Body has been non-functional since 2019 due to US blocking of appointments — weakening enforcement
- India-Japan CEPA (2011) and India-South Korea CEPA (2010) create additional bilateral obligations beyond WTO
- Goyal-led tariff rationalization exercise is also reviewing QCOs for potential overreach
Connection to this news: Japan and South Korea's concerns, if escalated, could become formal WTO consultations under the TBT Agreement — or lead to bilateral CEPA renegotiation demands, making this a live trade governance challenge for India.
Key Facts & Data
- India: world's 2nd largest steel producer; target of 300 million tonnes by 2030
- India issued 700+ Quality Control Orders since 2014 across industries
- India extended safeguard duty on flat steel imports for 3 years (2024)
- India exempted 72 overseas integrated steel plants from new input QCOs (including POSCO, Hyundai, JFE, Nippon Steel)
- China's estimated excess steel capacity: 150-200 million tonnes
- India-Japan CEPA signed: 2011; India-South Korea CEPA signed: 2010
- WTO Appellate Body non-functional since 2019
- DGTR (Directorate General of Trade Remedies) conducts anti-dumping investigations in India
- National Steel Policy 2017 targets 300 million tonnes capacity and $1 trillion investment by 2030