Context : U.S. Concerns at WTO
- The U.S. questioned India’s PLI scheme for specialty steel at the WTO Committee on Subsidies and Countervailing Duties.
- Main concern: Why promote steel production via subsidies when there is global overcapacity in steel?
- The U.S. implied the scheme may distort global markets and go against fair trade principles.
Relevance : GS 2(International Relations) ,GS 3(Indian Economy)
India’s Stand
- Objective: Reduce import dependence on high-grade/specialty steel and boost self-sufficiency.
- Despite being the 2nd largest steel producer, India is a net importer of specialty steel (including in FY25).
- PLI scheme aims to:
- Promote value-added steel production.
- Modernize technology and move up the value chain.
- Advance Atmanirbhar Bharat (self-reliant India).
Details of the PLI Scheme
- Launched in 2021, the PLI scheme covers 14 sectors, including specialty steel.
- Outlay for specialty steel: ₹6,322 crore (part of ₹1.97 lakh crore overall PLI budget).
- No export obligations or export-linked incentives – hence WTO compliant, according to India.
- Focus is purely on investment promotion and domestic sales growth.
India vs. Global Context
- India’s subsidies are modest compared to China’s $50 billion in estimated steel subsidies.
- India argues that its scheme addresses domestic gaps, not global market manipulation.
- Points to continued net import status as proof that overcapacity is not an Indian issue.
WTO & Policy Implications
- The issue highlights increasing scrutiny of industrial policies under WTO norms.
- It underscores a broader geopolitical-economic divide over the right to industrial development support in emerging economies.
- May also lead to bilateral trade discussions or countervailing investigations if escalated.
