India Initiates WTO Consultations with US Over Quartz Surface Tariff Quota Dispute.

India has formally sought consultations with the United States at the World Trade Organisation (WTO) regarding a new safeguard measure on imports of quartz surface products. This move comes in response to the United States imposing a four-year tariff-rate quota (TRQ), effective from August 15, following findings by the US International Trade Commission (USITC) that increased imports were significantly harming the US domestic industry. Under this measure, imports within the quota will face a 25% tariff in the first year, increasing to 40% for shipments exceeding the quota, with both rates gradually declining over the four-year period.

This measure poses serious implications for Indian exporters, who heavily rely on the US market for quartz surface products. Approximately 95% of India’s quartz surface production is exported to the United States, translating to an estimated export value of $700 million for the fiscal year 2024-25. For the common citizen, particularly those engaged in the quartz manufacturing sector, this safeguard could lead to a decrease in production and potentially impact employment levels. Additionally, the market may experience a rise in prices for quartz products due to increased tariffs, affecting consumer choices and costs.

Looking forward, the Indian government is prepared to escalate this issue if initial consultations do not yield a satisfactory resolution. The timeframe allows for a potential progression to the WTO’s Dispute Settlement Body (DSB) if consultations do not resolve the dispute within 60 days. In the long-term, India may need to explore alternative markets and bolster domestic production to mitigate reliance on the US market, while also actively seeking to negotiate trade terms that safeguard its export interests.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)