DGTR Recommends 12% Provisional Safeguard Duty On Steel Imports For 200 Days

New Delhi, Mar 19 (KNN) The Directorate General of Trade Remedies (DGTR), the investigation arm of the commerce ministry, has recommended imposing a 12 percent provisional safeguard duty for 200 days on certain steel products to protect domestic manufacturers from a surge in imports.

The recommendation follows an investigation initiated in December last year into the sudden increase in imports of 'Non-Alloy and Alloy Steel Flat Products' used across various industries including fabrication, pipe making, construction, capital goods, automotive, tractors, bicycles, and electrical panels.

The investigation was launched after a complaint from the Indian Steel Association on behalf of its members including ArcelorMittal Nippon Steel India, AMNS Khopoli, JSW Steel, JSW Steel Coated Products, Bhushan Power & Steel, Jindal Steel and Power, and Steel Authority of India Limited.

In its preliminary findings, the directorate determined that there has been a recent, sudden, sharp, and significant increase in imports of these products into India, causing and threatening to cause serious injury to domestic producers.

According to a notification dated March 18, the DGTR stated that ‘critical circumstances’ exist where any delay in applying provisional safeguard measures would cause damage difficult to repair, necessitating immediate action.

The directorate has recommended imposition of provisional Safeguard Duty at the rate of 12 percent ad valorem for 200 days pending final determination on the imports of the products under consideration. The finance ministry will make the final decision on implementing the duty.

Industry sources indicate that significant excess capacity exceeding domestic consumption in countries like China, Japan, and South Korea has emerged due to slowing demand in those nations.

Import figures show a substantial increase from 2.293 million tonnes during 2021-22 to 6.612 million tonnes during the investigation period (October 2023 to September 2024, and the three preceding fiscal years). These imports have primarily originated from China, Japan, Korea, and Vietnam.

While major domestic steel producers advocate for imposing the duty, user industries strongly oppose it, arguing that such measures would increase raw material prices and negatively impact their competitiveness.

MSME exporters from the engineering sector have expressed concern that additional duties on steel imports would make domestic products uncompetitive and affect the country's outbound shipments from the sector.

Hand Tool Association Chairman S.C. Ralhan warned that implementing the duty would harm exports from India, stating, "It will be very damaging for MSME exporters and manufacturers as the duty will increase prices of steel which is a key raw material for our industry. It will make exporters uncompetitive in global markets."

Safeguard measures, available to World Trade Organisation member countries in the form of duties or quantitative restrictions, are trade remedies designed to provide a level playing field to domestic players facing sudden and significant increases in imports.

Unlike anti-dumping duties, these safeguard duties apply uniformly against all countries when imports of a particular product increase unexpectedly to a point where they cause or threaten serious injury to domestic producers.

(KNN Bureau)