Mumbai: The interim ruling of the World Trade Organisation (WTO) declaring the US government's section 201 duty on steel imports as violative of global trade rules is likely to have an adverse impact on India as it would increase competitiveness of rival countries.
Experts point out that the safeguard duty, which was imposed on countries such as Japan, China, Brazil, New Zealand, South Korea and the European Union a year ago, had actually helped India as it was excluded from the list.
According to industry analysts, since Indian steel exporters faced anti-dumping duty on export of certain steel products to the US, the total import ban from countries such as China and Japan under section 201 had come as a relief to companies like India Iron and Steel, Tisco and Steel Authority of India (SAIL), which are exporting galvanised steel (a hot-rolled steel variation used in the construction industry) to the US.
S Jayaraman, an official with JVSL, says: ''It is too early to comment on the issue as the US has already gone for a review appeal to the WTO on the interim ruling. The impact of the decision will depend on the final WTO ruling on the issue.''
According to SAIL officials, the removal of duties might encourage the rival countries to start exporting products, which they could not earlier. Export of items like galvanised steel could become viable for such countries in the post-section 201 scenario, pushing prices down.
India exported a total of 6.67 lakh tonnes of galvanised products in 2001, and 9.08 lakh tonnes of cold-rolled products in the same year. Galvanised products form a major part of India's steel exports to the US, as there is a huge anti-dumping duty on hot-rolled steel to the extent of 42 per cent.