Japan on Friday asked the World Trade Organisation (WTO) to set up a panel to resolve the dispute with India over imposition of safeguard duty on steel imports.
As both the sides failed to resolve the issue in the bilateral consultation process, Japan has sought formation of dispute resolution panel, an official said.
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Japan in December dragged India to the WTO against certain measures taken by New Delhi on imports of iron and steel products.
Japan, which is the second largest steel producer in the world, had alleged that duties imposed on steel imports by India violates WTO trade norms.
In September 2015, India imposed provisional safeguard duty of 20 per cent on import of certain categories of steel with a view to protect domestic producers. Later in November last year, the government slapped the final duty.
As per the WTO's dispute settlement mechanism, the request for consultations is the first step in a dispute.
Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation.
After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel.
The official said that it would take over one month to set up the panel for hearing.
The dispute assumes significance as India and Japan implemented a comprehensive free trade agreement in 2011.
It gave easy access to Japan in the Indian steel market.
Indian industry has time and again demanded to take out the steel sector from the pact. But it can happen only after both the sides agree to do the same.
The bilateral trade between the countries stood at $14.51 billion in 2015-16. Trade is highly in favour of Japan.
