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The Ministry of Steel has written to the Finance Ministry asking it to look at the possibility of levying customs duty on Chinese stainless steel shipments coming into India.
Such a duty will benefit the domestic stainless steel industry which has been badly hit by such imports and is “facing low capacity utilisation”.
The import of stainless steel from China increased from about 20 per cent to about 60 per cent of overall imports into the country.
In a letter to the Revenue Secretary, written last month, and a copy of which is with businessline , a Steel Ministry official wrote : “This Ministry is of the view that imposition of CD (customs duty) on imports from China will be beneficial and will support the domestic stainless steel industry which is facing the problem of low capacity utilisation due to the surge in the imports. In view of the above, it is requested that the recommendations of the DGTR may be examined for suitable action.”
The DGTR has, in the sunset clause review, recommended the continuation of customs duty on stainless steel imports from China in April 2023.
In the Budget 2022-23, countervailing duties on imports of certain hot rolled and cold rolled stainless steel flat products, originating from China, were revoked.
Industry hit
The Steel Ministry, in its office memorandum, acknowledged the representation from various trade bodies and noted that a surge was observed in the import of stainless steel flat products from China.
A year before the Customs duty on stainless steel imports from China was revoked, that is in 2020-21, stainless steel imports from China were 157,000 tonnes, which increased by more than 300 per cent to 632,000 tonnes in 2022-23. “This has adversely impacted the domestic stainless steel industry,” it said.
In a letter to the Finance Minister, Nirmala Sitharaman, the Indian Stainless Steel Development Association (ISSDA) wrote that imports of a particular grade of stainless steel (called series 200, used in household items, kitchenware and utensils) surged by 528 per cent from 83,828 tonnes in April - December 2022 (when a Customs duty was in force from April 2017 - March 2022) to 526,708 tonnes, post withdrawal.
“Imports from China are 30 per cent lower priced than Indian offerings and many stainless steel MSMEs have closed shop already or are operating at lower capacities of 41 per cent (from a previous 61 per cent). Even PSU major SAIL’s Salem plant has been hit,” said Rajamani Krishnamurti, President, ISSDA.
DGTR investigation
Per findings of an investigation carried out by the Directorate General of Trade Remedies (DGTR), Chinese imports into India shot up 44 per cent (on an annualised basis) after suspension of CVD since February 2021. It stood at 49 per cent (annualised basis) for a 9 month period in 2022.
SAIL, while referring to the investigation, said, subsidised offerings “caused injury”, with players here losing market share to the extent of 20–30 per cent, while Jindal Stainless Ltd (JSL) said that 50 per cent of imports were priced below direct cost of Indian industry, while one third of imports were below the raw material costs here.
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