DGS initiates probe to impose safeguard duty on steel imports; MSMEs raise concerns
Updated: Sep 08, 2015 05:16:33pm
New Delhi, Sept 8 (KNN) Directorate General of Safeguards (DGS) today initiated a probe to determine imposition of safeguard duty on imports of certain types of steel, a move which has raised concerns amongst the MSMEs.
“Duty will make imports costlier. Iron and Steel are major inputs for manufacturing MSMEs. Any increase in the input cost will make survival of the MSMEs difficult as they operate in a very operating margins,” said an MSME entrepreneur.
The product is primarily imported from China, Korea, Japan and Russia. The demand for the same was made by JSW Steel, Essar Steel and SAIL due to a surge in imports.
An application was filed by the three companies before DGS for imposition of Safeguard Duty on imports of “Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more” into India to protect the domestic producers of PUC, said DGS.
The applicants claimed that their production together accounts for more than 50 per cent of the total production of PUC in India and it represents a major proportion of Indian production of the product under consideration in the country and thus have the standing to file the present application, it added.
The domestic industry has requested for immediate imposition of safeguard measures for a period of four years in their application. The domestic industry has also requested for imposition of provisional safeguard duty in view of steep deterioration in performance of the domestic industry as a result of increased imports of product under consideration, it said.
Safeguard duty is a WTO-compatible temporary measure brought in for a certain timeframe to protect country's domestic industry from cheap imports.
The imports increased to 33,79,360 tonnes in 2015-16 (annualised), from 12,92,099 tonnes in 2013-14. The percentage of import with respect to domestic production rose to 13 per cent, from 5 per cent during the period.
On the other hand, the market share of domestic producers fell to 37 per cent 2015-16 (annualised), from 45 per cent in 2013-14.
As a result, the profitability of the domestic industry declined sharply in 2015-16. (KNN Bureau)
“Duty will make imports costlier. Iron and Steel are major inputs for manufacturing MSMEs. Any increase in the input cost will make survival of the MSMEs difficult as they operate in a very operating margins,” said an MSME entrepreneur.
The product is primarily imported from China, Korea, Japan and Russia. The demand for the same was made by JSW Steel, Essar Steel and SAIL due to a surge in imports.
An application was filed by the three companies before DGS for imposition of Safeguard Duty on imports of “Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more” into India to protect the domestic producers of PUC, said DGS.
The applicants claimed that their production together accounts for more than 50 per cent of the total production of PUC in India and it represents a major proportion of Indian production of the product under consideration in the country and thus have the standing to file the present application, it added.
The domestic industry has requested for immediate imposition of safeguard measures for a period of four years in their application. The domestic industry has also requested for imposition of provisional safeguard duty in view of steep deterioration in performance of the domestic industry as a result of increased imports of product under consideration, it said.
Safeguard duty is a WTO-compatible temporary measure brought in for a certain timeframe to protect country's domestic industry from cheap imports.
The imports increased to 33,79,360 tonnes in 2015-16 (annualised), from 12,92,099 tonnes in 2013-14. The percentage of import with respect to domestic production rose to 13 per cent, from 5 per cent during the period.
On the other hand, the market share of domestic producers fell to 37 per cent 2015-16 (annualised), from 45 per cent in 2013-14.
As a result, the profitability of the domestic industry declined sharply in 2015-16. (KNN Bureau)
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