In order to provide relief to domestic producers, the Government has imposed safeguard duty on the import of seamless pipes and tubes, which are used in equipment for oil exploration, power generation, and bearing industry among others. Safeguard and anti-dumping duty are imposed to revitalize domestic industry from excessive or cheap import. Decision to impose safeguard duty has been taken after a petition filed by the domestic producers against the high imports from china and other countries. The domestic produces also stated that despite increase in the price of raw materials, importers were bringing their product at cheaper price, which is affecting the domestic industry.
The move is likely to provide benefit to domestic seamless pipes and tubes produces like Jindal Saw and ISMT. While, Indian firms like BHEL, ONGC and Oil India are among the largest consumers of such products. Country’s total demand of seamless pipes and tubes stood at around 5,84,098 tonnes in FY13 out of which 64% of India total demand was met through the imports.
The Central Board of Excise and Custom (CBEC) notified that safeguard duty will be imposed at the rate of 20 percent in the first year (August 13, 2014-August 12, 2015), 10 per cent in the second year (August 13, 2015-August 12, 2016) and at the rate of 5 percent in the third year (August 13, 2016-February 12, 2017). This will not be applicable on imports from developing countries such as Indonesia, Malaysia, Thailand and South Africa, besides others.