Commerce Dept Weighs Safeguard Duty On Steel Products Amid Import Surge

New Delhi, Dec 10 (KNN) The Commerce Department is currently conducting a thorough investigation into the steel ministry's request to impose a safeguard duty on certain steel products, responding to a significant increase in steel imports from countries including China, South Korea, Vietnam, and Japan.

While intended to shield local steel manufacturers, such a measure could potentially escalate steel prices, which may adversely impact micro, small, and medium enterprises (MSMEs), a critical consideration for government officials, reported Business Standard.

The Directorate General of Trade Remedies (DGTR), operating under the commerce department's administrative purview, has initiated a comprehensive review.

Officials have requested detailed data from the steel ministry to comprehensively assess the current market dynamics and potential economic implications.

Last month, the steel ministry proposed a 25 percent safeguard duty on the entire flat steel product value chain for a two-year period. Flat steel products are crucial components in construction, automotive, and electrical industries.

The ministry argues that a sharp rise in import volumes and declining average import prices have significantly impacted domestic steel companies' profitability.

Proponents of the safeguard duty suggest that such a measure could not only protect the domestic industry from cheap imports but also potentially facilitate capacity expansion, which is considered essential for sector decarbonisation.

There are also concerns about a potential influx of inexpensive Chinese steel imports due to ongoing international trade actions.

However, engineering exporters have raised substantial counterarguments.

The Engineering Export Promotion Council of India (EEPC) warns that implementing safeguard duties could render engineering exports less competitive in global markets. EEPC Chairman Pankaj Chadha emphasised that steel constitutes nearly 60 percent of production costs for most engineering products, meaning any price fluctuations could create significant market disruptions.

The EEPC plans to engage directly with commerce department officials to articulate the user industry's concerns.

Chadha suggested that support for domestic steel producers should be more targeted and strategic, rather than implementing broad safeguard duties that might trigger unintended economic consequences.

As the investigation continues, the Commerce Department faces the delicate task of balancing domestic industrial protection with broader economic competitiveness and sectoral sustainability.

(KNN Bureau)