India for ties with Brazil, China on steel

India is working on an alliance with other developing countries like China and Brazil on steel subsidy during the Organisation for Economic Cooperation and Development's (OECD) forthcoming negotiations in Paris.

"We are trying to forge a common group with China, Brazil and Egypt to negotiate with developed countries on steel subsidies. There will be further discussions with them later this month," Joint Secretary (Steel) JP Singh said on the sidelines of an UNCTAD-sponsored session on trade distortions in steel here.

Singh, who will lead the Indian delegation at the OECD talks in September, said the negotiations would be held as the anti-subsidy agreement on World Trade Organisation (WTO) has not effectively prevented developed countries from giving subsidies.

The talks will be held between 35 countries, including USA, Japan, South Korea, Australia, Russia and Canada.

It will focus mainly on prohibition of all steel subsidies and exemptions for all countries, specially developing countries. Singh said the government was already in touch with these developing countries to sort out their differences on subsidies and arrive at a common ground before the OECD talks.

A draft on steel subsidy, which would form the basis for the negotiations, was expected to be in place before the talks begin, he said.

Besides, differences have emerged between the developed nations and others on capacity expansion and subsidies. The developing nations have contended that capacity expansion should be allowed to continue and subsidies should be allowed for greenfield facilities.

India has also demanded that subsidies should be there so long as domestic consumption is below world average.

Currently, the country's per capita annual consumption is about 30 kg, while that of United States and Japan is 400 kg and 600 kg, respectively. The country has also asked for exemption of small scale steel units, which produce less than 500,000 tonnes annually, from any talks on subsidy.

Singh said representations have been received from various associations like stainless steel, alloy and ferro alloy makers for the restoration of the Duty Entitlement Payback scheme and these have been forwarded to the commerce ministry.

However, he added any restoration of DEPB benefits, which would be frozen from March 27, would have financial implications.