Indian Updates
Petitions filed before the High Court challenging orders of the CESTAT against certain Office Memorandums dismissed as infructuous (13 Feb)
Recently, the Hon'ble Delhi High Court disposed of multiple writ petitions filed by the Union of India, considering them infructuous. These petitions were filed by the Union of India, challenging orders issued by the CESTAT, whereby the CESTAT had set aside certain Office Memorandums and directed the Ministry of Finance to reconsider the recommendations made by the DGTR in respective cases. However, subsequently, various domestic industries wrote to the Ministry of Finance, withdrawing their rights arising from the respective Final Findings and corresponding CESTAT orders.
The Court noted that the Hon'ble Supreme Court had treated similar matters as infructuous, after the domestic industry relinquished its rights and claims. In view of the same, and having regard to the decision of domestic industries to forgo their rights, the High Court found it appropriate to take the same view. However, the Court kept the question of law raised by the Union of India open, regarding whether CESTAT has jurisdiction to set aside an Office Memorandum.
Amendment to the Customs Rules pertaining to Rules of Origin notified (18 Mar)
The Ministry of Finance, vide Notification No. 14/2025-Customs (N.T.), dated 18th March 2025, has amended the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. Pursuant to the amendment, the term 'certificate of origin' has been replaced by the term 'proof of origin'. As a result, the importers would now be required to provide an acceptable proof of origin, instead of the erstwhile certificate of origin to claim lower import duties under various trade agreements.
High Court finds that transition provisions under Clause 1.05 of the Foreign Trade Policy do not apply to quantitative restrictions imposed pursuant to safeguard investigations (28 Mar)
Some importers and traders of Low Ash Metallurgical Coke (Met Coke) challenged Notification No. 44/2024-25 issued by the DGFT, before the Hon'ble Delhi High Court, which imposed safeguard measures in form of quantitative restrictions (QR) on imports of Met Coke from 1st January to 30th June 2025. The petitioners argued that imports under ICLCs opened before the notification should be allowed. In this regard, the petitioners relied on Clause 1.05 of the Foreign Trade Policy, which states that if an import policy is shifted from 'free' to 'restricted,' imports made on or after the date of such restriction will still be permitted for importers who have a commitment through an ICLC opened before the imposition of restrictions. However, the Government and producers of Met Coke contended that the restrictions were imposed under Section 9A of the Foreign Trade (Development & Regulation) Act, 1992, which operates independently of transitional provisions under the Foreign Trade Policy.
The Court found that the transition provisions of Clause 1.05 applied in case of any such prohibition/restriction/regulation imposed by way of a notification under Section 3 of the Foreign Trade (Development & Regulation) Act, which enables immediate trade restrictions to be imposed. Section 9A of the Act is different in its scope, and contemplates imposition of restrictions after a detailed investigation by the Government concerning increased imports, causing serious injury to the domestic industry. Therefore, measures under Section 9A is a product of an elaborate quasi-judicial exercise, in contrast with the restrictions under Section 3. The Court also noted that subjecting a safeguard action to transition provisions under Clause 1.05 would completely defeat the purpose of the measures.
Updates concerning Measures by and against the USA
Executive Order issued by the USA to address threat to its national security from imports of Timber and Lumber products (01 Mar)
On 1st March 2025, the U.S. President issued an Executive Order, directing an investigation into whether imports of timber, lumber and their derivatives threaten the national security of USA. The Executive Order directs the Secretary of Commerce to initiate an investigation under Section 232 of the Trade Expansion Act, to determine the effects of imports of timber, lumber and their derivative products on the national security of the USA. Thereafter, the Secretary will issue a report within 270 days after consulting with the Secretary of Defense and heads of other relevant executive departments to assess the national security risks associated with the import dependency of timber, lumber and their derivative products.
The Executive Order indicated that although the USA has sufficient timber resources, the country has been a net importer of the raw material since 2016. The concern is that the import of timber, lumber and their derivative products are creating vulnerabilities in the supply chain and these materials are a critical part of the manufacturing industry, essential to the national security, economic strength and industrial resilience of the USA.
Executive Order issued by the USA to impose additional tariffs on countries importing Venezuelan Oil (24 Mar)
On 24th March 2025, the U.S. President issued an Executive Order, imposing additional tariffs of 25%, on all goods imported into the USA from any country that imports Venezuelan oil, whether directly from Venezuela or indirectly through third parties. These tariffs are in addition to the duties on imports already imposed under the International Emergency Economic Powers Act (IEEPA). The Order is effective from 2nd April.
The Executive Order provides that ongoing destabilizing actions of Venezuela, including its support for illicit activities and the policies of the regime of Nicolas Maduro continue to pose an unusual and extraordinary threat, necessitating economic measures to protect national security of the USA.
Proclamation issued for imposition of additional tariffs on imports of automobiles and automobile parts (26 Mar)
On 26th March 2025, the U.S. President signed a presidential proclamation imposing additional 25% tariffs on imports of automobiles (sedans, sports utility vehicles, crossover utility vehicles, minivans, cargo vans and light trucks) and certain automobile parts (engines, transmissions, powertrain parts, and electrical components) pursuant to the authority granted by Section 232 of the Trade Expansion Act, 1962. The tariffs on automobiles will be effective on 3rd April 2025 and the effective date for tariffs on automobile parts would be notified later, by 3rd May 2025.
The proclamation provides that the importers of automobiles under the United States-Mexico-Canada Agreement (USMCA) will be given an opportunity to certify their US content. Further, a system would be implemented so that the 25% additional tariffs will only apply to the value of their non-US content. The decision has been taken to protect and strengthen the automotive sector in the USA.
Global Updates
WTO members consider regional trade agreements (RTAs) involving Australia, Cambodia, China, India and Nicaragua at the Committee on RTAs meeting (18 Mar)
WTO members considered RTAs involving Australia, Cambodia, China, India and Nicaragua, including the India-Australia Economic Cooperation and Trade Agreement, at the Committee on RTAs meeting. The India-Australia Agreement was enforced on 29th December 2022 and allows Australia to eliminate customs duties on 98.3% of its tariff line by 2026, while India agreed to eliminate tariffs on 69.8% tariff lines by 2031. Further, both the parties agreed to enhance sectoral commitments beyond GATS, for trade in services.
The Committee also noted that there are 30 RTAs involving only WTO members and 38 involving non-members. Lastly, Ambassador Jose Valencia of Ecuador was elected as the new Committee Chair replacing Ambassador Eheth.
Ethiopia resumes its WTO accession negotiations (19 Mar)
On 19th March 2025, the Ethiopian delegation undertook that the accession process would be concluded by the 14th Ministerial Conference, which is to be held in Cameroon in March 2026. The talks regarding accession resumed after the 4th meeting of the Working Party on 30th January 2020. Under the HomeGrown Economic Reform Agenda, Ethiopia has undertaken reforms with respect to its foreign exchange system, the establishment of a securities exchange system and the creation of an investment holding for state-owned enterprises to boost liberalization and to ensure that its regulatory regime is compliant with the WTO Rules. Ethiopia stated that with respect to trade in goods, the country is committed to bound rates and would ensure maximum tariffs to be lower than the benchmark established for least developed countries concerning the agricultural sector.
Trade Policy Review of Australia, Cambodia and Ukraine concluded
The WTO Trade Policy Review Body conducted the trade policy reviews for Australia, Cambodia and Ukraine. This was the ninth trade policy review for Australia, third for Cambodia and second for Ukraine.
Following the review for Australia, it was observed that the economy of the country witnessed a quick recovery post-Covid, when compared to other similar sized economies. Australia maintained a healthy GDP growth rate. It continues to be a major exporter of raw materials and importer of finished products. Australia entered into many new regional agreements and multiparty agreements with several WTO members. While Australia was a major user of trade remedial measures prior to 2020, its use of such measures declined in the years following 2020, coinciding with the COVID-19 pandemic and the resulting interruption to international supply chains.
With respect to Cambodia, it was noted that despite being a least developed country (LDC), Cambodia emerged as one of the fastest growing economies in the region following its WTO membership. Cambodia has committed to graduating from its LDC status by 2029, and has also set the goal of achieving high-income status by 2050. The country achieved an increase in its GDP, at a rate of 5%, since its last review. In addition to regional trade agreements within the ASEAN framework, Cambodia signed three new bilateral agreements with China, South Korea and the United Arab Emirates. Cambodia recently established the National Committee on Trade Remedies, which would be in charge of conducting trade remedial investigation.
With respect to Ukraine, it was observed that while the county was one of the largest in Europe, the ongoing conflict has resulted in significant economic losses and decrease in the GDP. Ukraine reported the lowest GDP among the 15 emerging and developing economies in Europe. It was noted that due to the continued conflict, international trade relations of Ukraine witnessed a sharp downturn, despite efforts to revive the economy.
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