India's Directorate General of Trade Remedies has recommended the imposition of a safeguard duty for three years on imports of certain non-alloy and alloy flat steel products, in a bid to shield domestic manufacturers from a surge in shipments.
In its final findings, the commerce ministry arm concluded that there had been a "recent, sudden, sharp and significant increase" in imports of the product under consideration, which has caused and threatens to cause serious injury to Indian producers. The probe was initiated on a complaint filed by the Indian Steel Association, whose members include ArcelorMittal Nippon Steel India, JSW Steel, Jindal Steel & Power and state-owned Steel Authority of India.
The DGTR has recommended a safeguard duty of 12% in the first year, tapering to 11.5% in the second year and 11% in the third. The measure, it said, is necessary to give Indian steelmakers breathing space to adjust to the surge in low-priced imports driven by unforeseen global developments.
The government had already imposed a provisional safeguard duty of 12% for 200 days in April this year based on preliminary findings. A formal notification from the commerce ministry will determine the date of imposition of the final duty.
Interestingly, over 250 stakeholders, including automakers and electronics giants, had opposed the move, warning it will hike input costs, restrict critical grades, and erode export competitiveness, according to Global Trade Research Initiative.
In their submissions to the DGTR, automotive, engineering, and electronics majors, including Tata Motors, Maruti Suzuki, Hyundai, Toyota Kirloskar, LG, Samsung, Whirlpool, ABB, Siemens, Crompton Greaves, Havells, and L&T, warned that the duties would raise input costs, harm export competitiveness, and squeeze downstream users, the GTRI said in a statement.
"DGTR's decision ignores concerns over supply, pricing, and competition, and may serve to protect a few large producers at the expense of India's wider manufacturing ecosystem," it said.
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