Steel Companies Demand Curb on Imports
In an effort to salvage the dwindling steel industry and to curb the unfair trade practice of dumping, five major steel companies have approached the government to impose anti-dumping duty (ADD) and countervailing duty on particular steel products. This comes after the government’s decision to levy 20% import tax in September 2015 on certain steel products; however, it has failed to improve the condition of Indian steel companies. Last month, the government had also imposed minimum import price (MIP) for the period of six months on more than 150 steel products.
The firms which have approached the Directorate General of Anti-Dumping & Allied Duties are Steel Authority of India, Jindal Steel & Power, Essar Steel, JSW Steel and Tata Steel. If this is imposed, the products that would be affected are hot rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more. The Directorate General of Anti-Dumping and Allied Duties (DGAD) has already forwarded the file to the revenue department post-inquiry, recommending imposition of provisional levy ranging between $961.33 and $1,610.67 per tonne.
Similar reforms were made in the ceramic industry and this helped revive the industry in the 2015-16 financial year. Gujarat, which accounts for more than 50% of the Indian ceramics industry, had seen a turnaround of sorts with the Chinese imported tiles becoming 30% expensive; post the imposing of anti-dumping duty.
The steel industry is looking forward to a similar change of fortune once the finance ministry approves the recommendation of DGAD. The purpose of ADD, as explained by the commerce ministry is to balance out the distortive effects of goods exported to a country at a price lower than the one prevailing there already. China, one of the biggest exporters of steel in the world, among other countries were levied an ADD of $316 per tonne by India. These measures hope to level the playing field and make it easier for the domestic prodcuers to compete with international producers of the same product.
The government had also imposed a 20% safeguard duty on this category (hot rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm (millimetre) or more in September last year). The directorate-general was of the opinion last week to extend the duty to two and a half years because of the serious threat posed to domestic producers because of cheaper imports. The government has not taken a decision on this yet. More than 173 products have already come under the ambit of the minimum import price (MIP) for a duration of six months in an effort to protect domestic industries. The steel ministry is working closely with the finance ministry to iron out a financial package for the sector.
The call of the hour is to find a long-term solution for this issue, making sure that the various steps being taken towards avoiding the dumping of cheap steel products from China is prima facie. The respective ministries are expected to issue the much anticipated financial package in two months. This will definitely be a big boon for the Indian steel sector.