Government not to impose safeguard duty on steel
12 May 2009
The Indian government has decided not to impose safeguard duty on the steel intermediate products, such as hot-rolled (HR) coils.
The standing board on safeguards led by commerce secretary Gopal K Pillai said there was no need to impose a safeguard duty and the domestic steel companies should consider lowering their prices to beat competition from imports.
''The board decided that there was not enough evidence of threat to domestic industry and, therefore, no need to impose duties at once,'' Pillai said.
''Steel users have brought to our notice that they have appealed to steel makers that steel prices should be reduced further, matching import prices,'' Pillai pointed out.
Secretaries of the revenue, heavy industry, textile and steel departments were also present at the meeting.
Safeguard duty is a provision of the World Trade Organisation, allowing special curbs if a nation feels that imported goods are priced lower than the actual cost of producing these items.
The government last month started an investigation into cheap imports of HR coils from countries like China and Ukraine as the industry was clamouring for a 15 per cent duty on these items to safeguard the interests of domestic producers. (See: India weighs safeguard duty on certain steel imports).
The directorate general of safeguards (DGS) had recommended a 25 per cent safeguard duty on flat steel products based on complaints filed by some domestic manufacturers. It had made similar recommendations for paper, acrylic fibre and auto components.
''There was no reason why the usual procedure of consultations with all concerned should not be carried out by DGS before recommending duties on the products concerned,'' Mr Pillai said.
The board also asked the DGS to examine the issue further and seek views of the parties concerned, including consumers.
Global HRC prices have collapsed to about $410 a tonne from $1070 a tonne in last July, which made domestic HRC, ruling at $496 a tonne, uncompetitive.
India imports about 15 per cent of its HRC needs mainly from east European countries and China.