The Steel Ministry has suggested two options to the Commerce Ministry for the latter’s meeting with the United States Trade Representative (USTR) for resolving the issue of 25 per cent import tariff on steel imposed by the US.
Stating that the US move could lead to cross dumping into the country, the Ministry as well as domestic industry representatives said there are two options before the USTR — the first is to have a 25 per cent duty levied on all imported steel, and the second is to cap the quantity of steel that the US administration will allow to be imported into the country.
Domestic steel manufacturers are pinning hopes on the meeting between representatives of the Commerce Ministry and the USTR which is scheduled to be held in less than a fortnight in the US. There has already been one round of meeting with the American representatives in June-end. The approach to put a cap on imports is being preferred by the domestic industry as it allows 75 per cent of the subject steel to be consumed in the US and just 25 per cent to be left for a possible dumping into other countries. Effectively, the USTR could consider the annual steel imports as a reference point and could put a cap on allowing imports up to 75 per cent of the reference quantity for the time period the duty is enforced.
India’s steel exports to the US are not substantial (less than one million tonne out of a total domestic production of 100 million tonne). But, domestic manufacturers fear that a 25 per cent duty might result in dumping from South Korean firms that export nearly 8 million tonnes of steel to the US annually. “The 25 per cent duty barrier will make all imported steel uncompetitive in the US and raise fears of dumping into other nations,” a steel industry representative told BusinessLine .
On its part, India has already imposed anti-dumping duty to prevent imports of major steel products, mostly from China and Taiwan. But, these duties are far from effective in the present scenario. A steel sector representative said, “Domestic firms fear that the existing anti-dumping measures in India are inadequate as global prices of steel have risen considerably.”
In April last year, the Directorate-General of Anti-Dumping under the Ministry of Commerce had issued a final recommendation to fix the import price of hot rolled coil at $489 a tonne, hot rolled plates and sheets at $561 a tonne and cold rolled coils at $576 a tonne.
“The price of hot rolled coil is presently hovering at around $600 a tonne, while the anti-dumping duty is $489 a tonne. Since the import price is higher, the current duty levels are not effective,” the steel sector representative said.
The dumping duty is the price difference between the landed cost and the price indicated by the Centre.