Govt begins safeguard duty probe on steel imports

Deepak Kumar | The Dollar Business 

  Taking note of the complaints from domestic steel producers, the government has started an investigation to ascertain whether to impose safeguard duty or not on the import of certain steel products shipped from China, South Korea and other countries. The probe began after Steel Authority of India Ltd. (SAIL), Essar Steel India Ltd. JSW Steel Ltd. and Jindal Steel & Power Ltd. had asked the government to impose a 20% safeguard duty for a period of four years on imports of certain types of steel products. The products under consideration were hot rolled flat sheets and plates of alloy or non-alloy steel having nominal thickness less than or equal to 150mm and nominal width of greater than or equal to 600mm. “The application has been examined and it has been found that prima facie increased imports of ‘PUC’ (product under consideration) have caused or are threatening to cause serious injury to the domestic producers of ‘PUC’ and accordingly, it has been decided to initiate an investigation through this notice,” Director General of Safeguards had said in a statement on Monday. According to industry experts, the import restriction is necessary as supplies from China and other countries below the rate of domestic products continue to create challenges for the Indian manufacturers. “It is important. China has been dumping its surplus production in India and elsewhere at a throwaway price. The allegations are that Chinese steel companies are making huge losses. So, they just want to dump their production in elsewhere markets.  If China continues to have such attitude, it will create major problem in India,” C V Raghavan, Director of Finance at Ferro Alloys Corporation Ltd (FACOR), told the Dollar Business. In September this year, the government had imposed a 20% import duty for a period of 200 days to curb rising imports of certain steel products from China, Japan, South Korea and Russia. But the move failed to make any impact on India’s inward shipments as imports of steel products grew by 27.3% to 1.183 million tonnes (MT) in October over September 2015. “Last time, we felt that an implementation of 20% safeguard duty will create a level playing field, and we will be able to compete with China. But they reacted by slashing their steel prices further. This time we will see how they react to the additional safeguard duty, once implemented,” Raghavan said. The inflow of cheap steel imports from China, Indonesia, Japan, Russia and Ukraine has deteriorated the domestic steel industry. Keeping in mind India’s several infrastructure developmental initiatives, domestic steel industry has urged the government to implement the duty scheme for a period of four years. “The government is expecting India’s economy to get back in shape. Plus, the government says that it intends to make huge investments in infrastructure developments in the coming years. The industry, on the other hand, feels that during this period things are expected to stabilise, and until then some sort of protection should be given to the industry,” Raghavan said.  

December 09, 2015 | 6:04pm IST.