India Steel Market Watch
November 17: Multi-national companies with interest in India such as POSCO, Maruti Suzuki, Hyundai and ArcelorMittal, along with the Indian industry, have made a strong pitch against the imposition of a safeguard duty on steel.
They have argued the move would be counterproductive to the government's Make-in- India campaign and that it would impact foreign investments coming into India.
The public hearing called by the Director General of Safeguards (DG Safeguards) also saw participation from country delegations and embassy representatives. These included the European Union, Japan, China, Ukraine, the Russian Federation, Taiwan and Brazil. India has a free trade pact with South Korea and Japan, under which the countries enjoy substantial duty benefits on steel imports.
POSCO and Hyundai argued that steel imported from South Korea is for captive use and not for domestic sale that could have an impact on the domestic steel companies.
POSCO contended that it was forced to import from its parent company in South Korea as the local plants in India declined to supply steel products due to their own inability to produce the required quality and quantity.
In all, there were 29 presentations from Nippon Steel, POSCO Maharashtra, POSCO Korea, Mitsui, Hyundai Steel, Hyundai Motors, China Iron and Steel Association, Federation of Industries of India, Federation of Association of Maharashtra, RKB Global and Tube Products of India, among others.
DG Safeguards asked interested parties to make written submissions by November 23. The government will take a final decision on the duty by February after hearing all interested parties. In September, the government imposed a 20% safeguards duty for 200 days on the import of hot-rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more. The decision was taken on the basis of preliminary findings and the recommendations of the DG Safeguards, which comes under the revenue department of the finance ministry.
Nippon Steel argued that the steel required for auto production should be exempt from safeguard duty as the domestic industry does not have the capability or the technology required for production.
Tata Steel, Jindal Steel and Bhushan Steel supported the three petitioners - JSW Steel, Essar Steel and the Steel Authority of India.
A safeguard duty is allowed under the World Trade Organisation rules as a temporary measure for a specified period to check damage to a country's domestic industry from cheaper import. The market share of steel imports doubled from 6% to 12% in absolute terms between 2013-14 and 2015-16, preliminary findings showed.
Japan, South Korea and China accounted for about half the iron and steel imports into India in the first six months of the financial year, worth about $3 billion. Imports made up 5% of the country's total production of the under-investigation steel products (hot-rolled coil) in the year to end-March 31, 2014.