Safeguard duty on steel imports a welcome step

Deepak Kumar | The Dollar Business

Steel industry has welcomed the government’s recommendation to impose a 20% safeguard duty for a period of 200 days on certain steel products to check a surge in low-priced steel imports.   “The investigation by DG Safeguards has finally brought a point that serious injury has been caused (to) Indian steel industry due to surge in steel imports from various countries. Indian steel industry which has invested over 5 lakh crores needs to assured of fair competition practices,” Essar Steel’s Chief Commercial Officer H Shivramkrishnan told The Dollar Business. The government carried out an investigation after India’s steel makers Steel Authority of India, Essar Steel and JSW Steel filed an application recommending a safeguard duty on steel imports. The products under scrutiny were hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more. “The application has been examined and it has been found that prima facie increased imports of ("hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more) have caused or are threatening to cause serious injury to the domestic producers,” the Directorate General of Safeguards Customs and Central Excise said in a release. Growing steel imports have been a worrying trend for the domestic steel manufacturers. Market share of domestic steel producers have come down to 37% in 2015-16 from 45% in 2013-14. Steel imports have increased from 5% in 2013-14 to approximately 13% in 2015-16. In 2014-15, India imported 9.32 million tonnes of steel, up 72% from 2013-14. India has Free Trade Agreements (FTA) with Japan and South Korea, and they exported 3.5 million tonnes of steel to India in 2014-15. In April–August 2015, local demand increased by 4.6%, while total steel imports surged by 51% to 4.5 million tonnes during the same period. India is one of the few countries where demand is growing owing to the infrastructure boom in the country. “Every country in the world is protecting their domestic steel industry. Hence the step taken by the Indian government is in the right direction. Do you want steel industry in India to import your entire requirement? We need to have a long term perspective,” Shivramkrishnan added. Indian steel export has witnessed a decline, from 5.98 million tonnes in 2013-14 to 5.59 million tonnes in 2014-15. Some of the countries including U.S., Canada, Thailand, Indonesia and Mexico have blocked steel shipments from India. This is government’s third step since June to protect the domestic steel industry. Last month, it had raised import duty on flat steel products and long steel products to 10% and 7.5% respectively.  

September 11, 2015 | 1:30pm IST.