After getting a temporary relief in the form of 20 per cent safeguard duty on certain types of steel imports, the domestic industry has started to build up a case for imposition of anti-dumping duties.
Anti-dumping duties are preferred over safeguard duties as these can be applied over a longer period of time and need not be progressively lowered in the period of application.
“The domestic steel industry is keen that the government should impose anti-dumping duties on imports, but we need data of injury suffered by domestic producers over at least a nine-month period. Moreover, dumping has to be established too by the industry,” a Commerce Ministry official told
The industry claims that it would not be hard to prove that dumping — which means that imports are taking place at prices lower than those prevailing in the home markets of the sellers — is taking place. “While the South Korean and Japanese steelmakers are selling flat products at around $500 a tonne in their home markets, in India, they are selling the same for around $300 a tonne,” a senior industry official said.
Indian steel producers say that they attempted to sell steel in Korea and Japan, but their tenders were not accepted as these countries were keen on protecting their steel makers.
The industry is now trying to collect the requisite data for imposition of anti-dumping duties and is hopeful that it would have the required numbers over the next couple of months.
Imposition of anti-dumping duties is usually for five years. These need to be reviewed only if interested parties submit that there has been a change in the ground situation.
In case of safeguard duties, not only does it have to be progressively lowered if it is imposed for more than one year, there has to be a mandatory mid-term review in case the imposition period is three years. The duties have to be removed if injury due to high imports can no longer be proved.
Both duties are permissible under the World Trade Organisation rules.
Cost disadvantage The industry expects steel prices to remain at around $350-400 a tonne even after the safeguard duty expires in 200 days.
The Indian Steel Association, a representative body for domestic steelmakers, claims that the local industry is at a cost disadvantage which is why they will be unable to compete with imports at around $300 a tonne.
According to data furnished by the association, domestic steelmakers have a disadvantage of about $30 per tonne on higher interest costs, $20 per tonne on logistics, $35 a tonne on infrastructure, $7 a tonne on inter-state taxes, $7 a tonne on District Mineral Foundation and Forest Development Tax outgo on iron ore mining.
“All this adds up to around $100 a tonne cost disadvantage for the domestic industry. However, we are competitive. But that competitiveness can last till prices hover around $400 a tonne,” the official quoted above said.