Anti-dumping duty on steel to hurt engineering industry

Anti-dumping duty on steel to hurt engineering industry

Imposition of anti-dumping duty on steel will have a multifarious effect on the industry. It will hurt engineering as well as construction industries

Deepak Kumar  | The Dollar Business Bureau 

  As the government announced anti-dumping duty on steel, second time in the last three months, to check imports, the engineering industry on Monday said the move will hurt the sector which includes mainly MSMEs. “With exports being slow, these measures would boost up the steel industry but will hurt the engineering industry, especially the MSMEs sector. Most of the exporting units, which include about 60% of the MSMEs, don’t have access to advance license. Consequently, their prices are going to become higher, and they will be non-comparative in the market,” EEPC (Engineering Exports Promotion Council) India Chairman Anupam Shah told the Dollar Business. Last week, the government had imposed an anti-dumping duty ranging from 5% to 57% on imports of certain steel products from countries such as China, South Korea, the US, South Africa, Thailand, Taiwan and the European Union. The duty was applied for a period of five years. The decision came after the government, in September this year, imposed a 20% duty on some steel products for a period of 200 days. The move had failed to make any impact on rising shipments of steel as imports during October grew by 27.3% to 1.183 million tonnes (MT). Shah recommended a compensatory mechanism for the engineering sector exporters in order to give them a level playing field. He urged the government to put in place the duty mechanism the same day when the anti-dumping structure was implemented. “The government should have a duty mechanism in place for compensating for the duty that we would have paid as anti-dumping can’t be compensated through duty drawback. If not done so, engineering exports will become non-comparative because domestic prices are going to rise,” Shah said. Shah also pointed out the negative impacts of the anti-dumping on India’s other sectors, especially engineering and construction sectors and said, “It will have a multifarious effect on the industry. On one hand it will benefit the domestic steel industry, but on the other it will hurt the engineering as well as construction industries, which is already reeling under demand slump.”  

December 14, 2015  | 05:50pm IST

The Dollar Business Bureau - Dec 14, 2015 12:00 IST