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WTO to probe Indian auto policy after EU complaint

The World Trade Organisation set up a dispute settlement panel on Friday to investigate European Union complaints that certain measures under India's auto import policy violate free trade rules.

The panel was established at a meeting of the Geneva-based WTO's dispute settlement body, four months after another dispute settlement panel was set up following an identical complaint by the United States.

The EU says that India is in breach of WTO rules with its system requiring manufacturers of automobiles to sign a memorandum of understanding as a condition for obtaining licences to import automotive products that are subject to import restrictions.

The same rules also require the companies to establish production facilities in India, to make a minimum investment and to export a certain amount of automotive products.

The 15-member trade bloc argues that the procedure of requiring a memorandum of understanding and the export obligation are in violation of WTO's trade-related investment measures.

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