Although there is now a safeguard duty and minimum import prices on various steel products, five major companies in the sector have asked the government to also impose anti-dumping duty (ADD) and countervailing duty on selected products.
The five are JSW Steel, Steel Authority of India, Tata Steel, Jindal Steel & Power and Essar Steel. They have asked the Directorate General of Anti-Dumping & Allied Duties to impose these two duties on particular steel products of one category - hot rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more, said a senior government official.
In September last year, the government had imposed a 20 per cent safeguard duty on various products of this category only. Last week, the directorate-general of safeguards said the duty should be extended for two and half years, as increased imports threatening to cause serious injury for domestic producers. The government is yet to take a decision on extension.
Last month, the government had imposed a minimum import price (MIP) for six months on as many as 173 steel products to protect domestic companies from cheaper import. And, the steel ministry is working with the finance ministry on a financial package within two months for the sector.
"The companies are looking for a long-term solution. Unlike safeguard duty or MIP, the anti-dumping duty or countervailing duty is country-specific. Thecompanies' focus is on China, top steel exporter to India," added the official.
The steel ministry says imports were down 25 per cent in the first 11 months of financial year 2015-16. In 2014-15, imports were 9.3 million tonnes; this year, these would be around seven mt.
Safeguard duty is allowed under World Trade Organization rules as a temporary measure for a specified period, to check damage to a country's domestic industry from cheaper import.
According to the commerce ministry, the purpose of ADD is to rectify the trade-distortive effect when goods are exported by one country to another at a price lower than its normal value. In June last year, India imposed ADD of up to $316 a tonne on import of certain steel products from three countries, including China.
Countervailing duties are meant to level the playing field between domestic producers and foreign producers of the same product who can afford to sell it at a lower price because of the subsidy they receive from their government.
source: http://www.business-standard.com