Posted on 16 Jul 2019
Indian steel users have voiced their concern over Indian steelmakers’ petition for a 25% safeguard duty on various steel product imports. Producers claim this duty is necessary due to the threat of steel being diverted to India from other regions that have imposed safeguard measures.
Representing steel users in India, the Citizen Civic Solutions Foundation (CCS) says the imports in question represent only 6% of the total gross production in India. “As per WTO rules, safeguard measures are defined as ‘emergency’ actions in response to large scale increase in imports or a surge in imports,” the organisation observes. “But the ground reality is that imports have considerably decreased in the last three years as a result of a series of various protective measures.”
"A significant portion of the imports comprises grades, sizes and quality that is not available sufficiently or timely in India or of finished goods for export purpose,” CCS comments in a note seen by Kallanish. “India has signed Free Trade Agreements with Japan and South Korea, but the quantities of material imported from these countries are of very small percentage of the total consumption in India.”
Due to measures including minimum import price, safeguard duty, anti-dumping duty, and steel quality control order, Indian steel users have been paying substantially higher prices to domestic mills compared to international prices, CCS says.
“We strongly disagree with the argument that imports will affect the economy badly,” says CCS spokesperson Vaibhav Purohit. “Instead, imposition of safeguard duty on steel imports will make steel costlier and only a few steel mills will be in a dominating position, creating a monopolistic market in India, which will give rise to agitation amongst the steel users, traders, SMEs and MSMEs.”
Steel user associations have written a letter to various government ministers urging them not to import safeguard duties. While domestic prices have been high, demand for steel in India is very low due to various factors such as elections, liquidity issues in the market, CCS claims. “With the consumer industry already reeling under a variety of problems, this situation has added another dimension to their stress,” the organisation concludes.
