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WTO to investigate US complaint against India

A United Sates request for a panel of World Trade Organisation experts to look into its complaint against India's investment regime for motor vehicles got the green light here Thurday, trade sources said.

Despite consultations between the US and India to try to resolve the dispute, the parties have so far failed to make headway and the US States has asked, for a second time, for the WTO's dispute settlement body to intervene.

The US has complained that certain Indian measures affecting trade and investment in the motor vehicle sector contravene India's commitments under WTO agreements.

The US ambassador to the WTO, Rita Hayes, told today's meeting of the DSB that manufacturers in the sector could not get import licences for automobiles or their components without agreeing to a series of requirements that include the purchase of locally-made materials.

India's ambassador Srinisavan Narayanan said he was "deeply distressed and disappointed" at the second US request for a panel and did not believe the measures violated WTO commitments, sources said.

He added that the WTO should not create the impression that its practices stood in the way of developing countries.

Many developing countries' efforts to achieve even some degree of industrialisation were being challenged on the basis of the WTO's investment measures agreement (TRIMS), he said.

Developed countries pledged last December to show restraint over disputes on developing nations' investment regimes and not to bring them before the WTO. But the US has always insisted on its right to consider such cases on an individual basis.

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