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India should build a strong case against China for dumping steel and steel-based products, instead of imposing a safeguard duty that harms the interests of domestic user industries, according to CII President Sumit Mazumder.
India recently imposed 20 per cent safeguard duty on the import of any flat steel with a width of 600 mm and above, on the back of rising imports from China, South Korea and Japan.
“The safeguard duty was driven (aimed at) by China. They produce huge quantities of steel and suddenly there is no demand for it. So they resorted to dumping. I prefer anti-dumping over safeguard. Unfortunately, we take years to impose anti-dumping,” he told BusinessLine in an exclusive interview.
Steelmakers in Korea and Japan score over their Indian counterparts in terms of cost competitiveness and range of products, said Mazumder.
“China is resorting to dumping. But I don’t believe Korea and Japan are resorting to that. Besides, we have FTAs (free trade agreements) with Korea and China,” he added.
Mazumder is also Managing Director of TIL Ltd, which uses steel to manufacture infrastructure equipment such as cranes and excavators. The safeguard duty has helped domestic steelmakers, but at the cost of downstream industries, he said.
Local manufacture “I have a very strong view. There should not be any extra duty for importing grades that are not manufactured in the country. High-grade and high-tension steel are not manufactured here. If they are not manufacturing, why will we protect?” he said.
Asked about the impact of the safeguard duty on TIL, he said costs are bound to increase.
Chinese manufacturers are selling cranes with three-year interest-free suppliers’ credit, against 12 per cent per annum interest in India. “Is it not dumping?” he asked.
While maintaining that TIL is able to hold on to its market share by virtue of better services, Mazumder said crane imports from China are on the rise.
The CII President is confident that protection may offer domestic steelmakers some interim relief. But, in the long run, the industry should become cost-competitive.
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