India: DGTR rejects ISA’s Petition to Impose Safeguard Duty on Steel Imports

As per the latest market sources, the Commerce Ministry’s trade investigation arm, DGTR (Directorate General of Trade Remedies) has rejected Indian Steel Association’s (ISA) plea to impose restrictions on steel imports in the form of 25% Safeguard duty on the grounds that the criterion for applying safeguard duty have not been met.

The escalating trade war between two major economies China and U.S. that has resulted in both the nations imposing heavy restrictions on various imports including steel have compelled other countries such as EU, Canada, Vietnam (to name a few) to put barriers on their steel imports on the grounds of excess steel being dumped by China.

With countries restricting their steel imports, Indian manufacturers feared that now China will divert its steel over supply to India. Subsequently, In June 2018, the Indian Steel Association (ISA), on behalf of domestic steelmakers, filed a petition with DGTR arguing that as a consequence of duties imposed by the U.S. and consequently by the EU, Turkey and Canada, steel exports from some Asian countries are being diverted to India.

The ISA petition sought a tapering safeguard duty on semis, flats, longs, pipes and tubes, stainless steel and railway products, over a period of four years – starting with 25% in the first year and going down to 22% in the fourth year. Steel exporters from South Korea, Japan, China, and ASEAN countries have diverted as much as 43% of the volume, or 1.204 MnT, that they lost from the US into India, the petition claimed. However, with DGTR rejecting the ISA’s petition, imports will continue to enter the Indian boundaries. This coupled with poor domestic demand from infrastructure and automobile sector and rising raw material costs have put Indian steel manufacturers in a complete fix.

Previously, domestic steelmakers had convinced the government to impose trade remedial measures in 2016 and 2017, argue that whatever gains those measures achieved will be eroded if the government failed to immediately impose safeguards against steel imports. They expect the trend to worsen with the Eurasian Economic Union – which includes Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan – also having initiated safeguard investigations.