Three major steel companies have sought anti-dumping duties (ADDs) on cold rolled steel products.
Alongside, Vedanta and Hindalco have sought imposition of safeguard duty on import of unwrought aluminium. Investigations have begun on both.
On an application filed by JSW Steel, Steel Authority of India and Essar Steel, the Directorate General of Anti-Dumping & Allied Duties (DGAD) has initiated the investigation, said a person privy to the development. The investigation has started even after safeguard duty and minimum import prices (MIPs) on various steel products have been levied by the government.
“We have initiated investigation on CR steel products from China, Japan, Korea and Ukraine,” a government official confirmed.
In the case of aluminium, the Directorate General of Safeguards (DGS) has initiated a probe into increased import of unwrought aluminium allegedly injuring the domestic industry. The period of investigation is 2011-12 till 2015-16. The application, filed by Vedanta, Bharat Aluminium Company (Balco) and Hindalco, has sought “immediate imposition of a safeguard duty on the imports of unwrought aluminium for four years”, both for alloyed and non-alloyed wrought aluminium products.
As reported earlier by this newspaper, DGAD is also investigating another complaint by five major steel companies on products of one category, hot rolled (HR) flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more. Apart from the three previously mentioned, these five major companies include Jindal Steel & Power and Tata Steel.
In September, the government had imposed a 20 per cent safeguard duty for six months on various products of the HR category. Last month, it extended the duty for two and a half years, saying increased imports threatened serious injury to domestic producers.
In February, the government had also imposed an MIP for six months on 173 steel products, to protect domestic companies from cheaper import. And, the steel ministry is working with the finance ministry on a financial package for the sector.
“Both the anti-dumping applications, for the HR and CR steel products, were sent within a small time interval,” said the source.
DGAD is also investigating a complaint by Jindal Stainless for imposition of countervailing duty on various stainless steel products. The steel ministry said imports were down 25 per cent over a year before in the first 11 months of 2015-16. In 2014-15, imports were 9.3 million tonnes; in 2015-16, these would be seven mt.
In the latest available data, China has had 166 anti-dumping investigations intitiated against it, with duty imposed on 134 of those. There are 11 new cases currently being investigated in the case of China, of a total of 32.
While the department of commerce recommends an ADD, it is the finance ministry which levies it. The petitioners should account for at least 25 per cent of total domestic production to appeal for an investigation. The probe normally takes a year and may be extended by six months. Preliminary findings are normally to be made within 60-70 days and a provisional duty may be imposed, for six months and extendable till nine months in certain circumstances.
The domestic aluminium industry has asked for an increase in import duty to 10 per cent from the current 7.5 per cent. It was five per cent till revised in this year’s Union Budget. The import of aluminium rose 78 per cent between 2011-12 and 2015-16, touching 432,000 tonnes. Domestic production rose 43 per cent in the period, to reach 1.5 mt.
The applicants have said, “The profitability of the domestic industry has deteriorated in the recent year (2015-16) and the domestic industry is now suffering financial losses.” The application, reviewed by Business Standard, also said the market share of imports had increased to 15 per cent from 11 per cent over four years.
The DGS notice for investigation said, “After examining the application on different economic parameters, it is seen that prima facie, despite improvement in productivity, increased imports of PUC (alloyed and not alloyed unwrought aluminium) in absolute terms have caused losses to the domestic industry and are threatening to cause serious injury to domestic producers of PUC.”
Safeguard duty is allowed under World Trade Organisation rules as a temporary measure. The purpose of ADD is to rectify a trade-distortive effect when goods are exported by one country to another at a price lower than its normal value.
In June last year, India imposed ADD of up to $316 a tonne on import of certain steel products from three countries, including China.
Source: business-standard.com