India seeks waiver from U.S. steel and aluminium tariffs

NEW DELHI, March 28 (Reuters) - India has asked the United States to exempt it from higher tariffs on steel and aluminium, saying Indian exports of the two products did not pose a security threat to America, three government officials said.

Last week, U.S. President Donald Trump suspended tariffs for Argentina, Australia, Brazil, South Korea, Canada, Mexico and the European Union, the biggest U.S. trading partner, until May 1, 2018, as discussions continue.

The administration said countries not on the list could discuss with Washington ways to address U.S. national security concerns caused by imports of steel from that country.

India's trade ministry has written to the U.S. government, asking that it also be exempted from the 25 percent levy on steel and 10 percent on aluminium to protect U.S. national security and economic interests, grounds that experts say suggest are primarily aimed against China.

"The tariffs will definitely affect our exports. And clearly, as far as the quantum is concerned and the type of steel is concerned, there is no such thing as a security threat to the U.S.," Steel Minister Chaudhary Birender Singh told Reuters.

The United States accounts for 2 percent of India's steel exports but the move comes at a time when long-festering trade differences between the two countries are already aggravated, triggered by tariffs that India has imposed on dozens of products in recent months as part of steps to boost the domestic industry.

Indian Foreign Secretary Vijay Gokhale met U.S. Trade Representative Robert E. Lighthizer ten days ago and asked that the new trade measures not apply to India, a top official involved with framing of government policy told Reuters.

"India is not going to be a security threat. And if you are looking at the trade deficit, some of it has definitely reduced," the official said.

India is one of the countries that the Trump administration had named on its list of countries with which it had a large deficit.

Trade between India and the United States was $115 billion in 2016 and the deficit stood at $31 billion. But the official said the imbalance had improved in 2017.

A third government official said India would also emphasise to Washington the small amount of steel exports to the United States.

The big worry is that many countries faced with higher tariffs in the United States such as China will ramp up exports to India, imperilling the domestic industry, the official said.

According to an internal government note prepared this month, the steel ministry was concerned over displaced exports coming to India and said the government would take "proactive trade remedial measures" to protect the domestic industry from "any unfair trade practices".

"The countries which are currently exporting to the U.S. will be forced to look at other major steel consuming markets like India to sell their surplus and (it) is likely to distort our domestic markets considerably," the note said.

According to a separate industry note from this month, the total amount of displaced exports globally could be as high as 27 million tonnes, some of which was likely to be routed to Indian markets, it said. (Editing by Nick Macfie)