Steel dump from China: India’s Commerce Ministry recommends 12 per cent safeguard duty on certain products

Domestic steel players have raised concerns over increasing imports of steel from nations like China

New Delhi: The Commerce Ministry’s investigation arm DGTR has recommended the imposition of a 12 per cent provisional safeguard duty for 200 days on certain steel products with an aim to protect domestic players from a surge in imports.

Last year in December, the Directorate General of Trade Remedies (DGTR) started the investigation into the sudden surge in imports of ‘Non-Alloy and Alloy Steel Flat Products’, used in various industries, including fabrication, pipe making, construction, capital goods, auto, tractors, bicycles, and electrical panels.

The investigations were conducted following a complaint from the Indian Steel Association. The directorate in its probe has preliminarily found that there is a recent, sudden, sharp and significant increase in the imports of these products into India, causing and threatening to cause serious injury to the domestic industry/producers.

The directorate in a notification dated March 18 said there exist critical circumstances, where any delay in application for provisional safeguard measures would cause damage which would be difficult to repair. There is a necessity for the immediate application of provisional safeguard measures.

“The authority recommends imposition of provisional Safeguard Duty at the rate of 12 per cent ad valorem for 200 days pending final determination on imports of the product under consideration,” the DGTR said in the notification.

The Finance Ministry will take the final decision to impose the duty. Safeguard measures in the form of duty or quantitative restrictions are trade remedies available to the World Trade Organization member-countries. They are imposed to provide a level-playing field to domestic players in case of sudden and significant increase in imports of a product.

According to the industry, the existence of significant excess capacity far exceeding domestic consumption in China, Japan and South Korea have arisen due to slowing demand in those countries. While some big domestic steel makers are advocating for imposition of the duty, the user industry is strongly against it as the duty would push raw material prices, impacting their competitiveness.

Domestic steel players have raised concerns over increasing imports of steel from nations like China. MSME exporters from the engineering sector have stated that any move to impose additional duties on steel imports would make domestic products uncompetitive and impact the country’s outbound shipments from the sector.