In order to protect steel industry from rising imports, the government is likely to soon impose safeguard duty on imports of certain types of steel on the recommendations of The Directorate General of Safeguards (DGS), following demand for the same by JSW Steel, Essar Steel and SAIL. The steel producers are seeking safeguard duty as it would also cover imports from countries like Japan and South Korea, with which India has free trade pacts. The domestic industry has urged for imposition of provisional safeguard duty in view of a steep deterioration in the performance of this industry in view of imports surge.
DGS has examined the application received from the major steel producers and found that prima-facie evidence that increased imports of certain kinds of steel are hurting the domestic producers hence initiated the investigation and will soon take a decision. The major steel producers, representing 50 percent of the domestic production, have complained of surge in imports of steel products like hot-rolled steel and other variants from China, Korea, Japan and Russia and they had moved DGS, for imposition of the levy on imports of hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more for four years.
Last month, with an aim at helping domestic players battling cheap Chinese imports after the currency devaluation by China, the government had hiked import duty on base metals, including iron and steel, by 2.5 percent. Earlier, in June, India imposed anti-dumping duty of up to $316 per tonne on imports of certain steel products from three countries, including China, to protect domestic producers from below-cost inbound shipments. The imports increased to 33, 79,360 tonnes in 2015-16 (annualised), against 12, 92,099 tonnes in 2013-14. During the same period the percentage of import with respect to domestic production rose to 13 percent, from 5 percent. According to DGS, the market share of domestic producers in the current fiscal is likely to fall from 45 percent to 37 percent.