India had approached Geneva-based WTO for setting up of the dispute panel as both the countries failed to resolve the issue in a bilateral consultation process under the dispute settlement mechanism of the WTO.

The dispute settlement body of World Trade Organisation (WTO) has agreed to set up a panel to assess if high customs duties imposed by the US on certain steel and aluminium products infringes global trade norms, an official said.

India had approached Geneva-based WTO for setting up of the dispute panel as both the countries failed to resolve the issue in a bilateral consultation process under the dispute settlement mechanism of the WTO.

"The dispute settlement body has agreed to establish a panel to rule whether additional duties imposed by the US on imports of certain steel and aluminum products comply with WTO rules," the official added.

Consultation is the first step of the dispute settlement process at the WTO. If the two countries are not able to reach a mutually agreed solution through consultation, a country can request for a WTO dispute settlement panel to review the matter.

Imposition of high import duties on these items by the US has impacted exports of these products by Indian businesses. India has alleged that the US move is also not in compliance with global trade norms.

Besides India, Russia, Norway, Canada, Mexico, Switzerland, and European Union have also dragged the US in the WTO on Washington's move to impose 25 percent and 10 percent import duties on certain steel and aluminium products, respectively, which triggered global trade tensions.

India has a significant export interest to the US on the steel and aluminium sector. India exports steel and aluminium goods worth about $1.6 billion a year to the US.

The US had imposed these duties on grounds of national security.

Biswajit Dhar, professor of economics at Jawaharlal Nehru University, stated that the US decision would not only impact India's export of these goods but also affect global trade.

Some experts, however, said that dragging the US in the dispute over the issue is not in favour of India, as New Delhi has a trade surplus with Washington.

India's exports to the US in 2017-18 stood at about $48 billion, while imports were $26.7 billion.

Both the countries are also involved in several other disputes in the WTO. Those disputes are in the areas of poultry, export incentives, solar and steel.

In retaliation to the imposition of duties by the US, India has decided to increase customs duty on 29 American products such as almond, walnut, pulses and iron and steel items. The duties would come into effect from December 17.