India may impose an anti-dumping tax on Chinese steel. The tariff charge of up to USD 185.51 per tonne on Chinese steel for five years will possibly be imposed with a view to secure domestic players from cheap imports of the products from the bordering country. EurAsian Times analyses the impact of this move on India-China trade and economic relations.
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JSW Steel Ltd, Sunflag Iron & Steel Co, Usha Martin, Gerdau Steel India, Vardhman Special Steels and Jayaswal Neco Industries Ltd had together filed an application for initiation of the probes and levying of anti-dumping duties on the steel.
In its anti-dumping inquiries, the Directorate General of Trade Remedies (DGTR) has said that dumped imports of ‘straight length bars and rods of alloy steel’ from China have risen in absolute terms during the probe period of 2016-17.
The statement said that the dumped imports are undermining the costs of the domestic industry and due to this the profit of the domestic industry, return on capital employed and cash profits have dwindled during 2016-17.
“The authority recommends imposition of anti-dumping duty” on the imports from China “for a period of five years,” the DGTR has stated in a notification.
It has recommended duty in the range of USD 44.89 per tonne and USD 185.51 per tonne. However, it added that no anti-dumping duty shall be payable on imports of manufactured bars and tool and die steel if their landed value is above USD 659.91 per tonne.
If the landed value is lower than USD 659.91 per tonne, then the difference between that value and USD 659.91 per tonne shall be payable as anti-dumping duty, it added. While the DGTR, under the Commerce Ministry, suggests the duty, the final call is being taken by the Finance Ministry.
Imports of straight length bars and rods of alloy steel from China have escalated from 56,690 tonnes in 2013-14 to 1,80,959 tonnes in 2016-17. India’s cumulative imports surged from 1,32,933 tonnes in 2013-14 to 2,56,004 tonnes in 2016-17. The demand for this steel increased in India too to 16,69,653 tonnes in 2016-17 from 15,14,795 tonnes in 2013-14.
Domestic steel manufacturers always flag concerns over the imports from the neighbouring country, with which India has a huge trade deficiency. The trade gap with China has increased to USD 63.12 billion in 2017-18 from USD 51.11 billion in the previous financial year.
The DGTR has also stated it recognises that the imposition of anti-dumping duties might affect the price levels of the product in India. However, fair competition in the market will not be affected by the imposition of these trade remedy measures.
In contrast to this, the imposition of the anti-dumping tax would remove the unfair advantages attained by dumping methods, prevent the decline of the domestic industry and help maintain the availability of wider choice to the consumers of these goods, it added.
In general, the scope of these duties is to reduce injury caused to the domestic industry by the unfair trade practices of dumping to re-establish a situation of open and fair competition in the Indian market, which is in the interest of the country. “Imposition of anti-dumping duties, therefore, would not affect the availability of the product to the consumers,” it said.