As part of its protectionist measures for the domestic steel industry, the Indian government this week ordered multiple investigations against steel exports to India, especially from China.
The two separate investigations on anti-subsidy and anti-dumping were ordered on Wednesday and Monday, respectively, by the Directorate General of Anti-dumping and Allied Duties (DGAAD), an arm of the ministry of commerce and industry.
The anti-subsidy investigation is aimed at countering subsidies provided to Chinese stainless steel manufacturers by its government. India is investigating whether to levy a country-specific duty, also known as a countervailing duty, on imports to nullify subsidies provided by other nations and intended to make prices of domestic products competitive. Importing countries also have other options, such as introducing an anti-dumping duty, to make domestic prices at par.
According to the 12 April notice, the period of anti-subsidy investigation will be January 2015 to December 2015. In addition, the economic losses suffered by the industry during 2012-15 will also be investigated.
China has improved its stainless steel production capacity and registered a production of 21.7 million tonnes (MT) for financial year 2014-15. According to Joint Plant Committee, a government-authorised institution to collect data on Indian iron and steel industry, India’s steel imports have continued to grow unabated and increased by 27% year-on-year to 12.7 MT during April-March 2016. The period also saw exports fall by 24%.
The 11 April notice initiated an enquiry for anti-dumping on hot-rolled flat steel products in coils, sheets and plates against six countries including China, Japan, South Korea, Russia and Indonesia. In the hot rolling process, steel is manufactured at high temperatures as it is easy to give it shape.
VCCircle on 14 March reported that India is investigating whether to levy a duty on import of stainless steel products from China to protect Indian manufacturers and thus counter subsidies provided to Chinese stainless steel manufacturers by its government.
On 17 March, VCCircle also reported that Indian steel manufacturers, including state-owned Steel Authority of India Ltd (SAIL), JSW Steel and Essar Steel, sought intervention on imports of hot-rolled coils and pitched for anti-dumping duty on imported steel.
The Indian stainless steel industry welcomed the government’s move.
“The outcome of the investigation is likely to establish the injury to the domestic players on account of multiple subsidies provided to the Chinese firms by the government at various levels and other public bodies,” said S. Bhattacharya, director, Jindal Stainless Ltd.
“We have seen a surge in steel imports and China accounted for around 4.1 million tonnes during the last fiscal. For hot-rolled coils, quantum of injury is being investigated by the government,” added a Tata Steel spokesperson in an emailed response.
The National Democratic Alliance government has taken a series of steps to help the stressed steel sector since last year. It raised import duty on steel in 2015 on two occasions and extended the provisional safeguard duty on steel till March 2018.
The government also imposed a minimum import price (MIP) on 173 types of steel products in the range of $341-752 per tonne on 5 February 2015, for a period of six months. MIP helps in setting a floor price, which in turn does not allow steel imports below this price. The government is also preparing a bailout package for the steel industry.
Experts said that the steps will bring partial relief to the industry.
“It will not help to that extent as huge capacities are still lying in China, but definitely it will bring some relief to the industry. The most important thing is how much we can push the entire issue at the World Trade Organization,” said Arvind Mahajan, head-energy and government practice, KPMG India, a consultancy firm.
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