 "Govt-industry tie-up can bring faster anti-dumping action")
There is no point in complaining that the authorities in the US and European Union move faster than their counterparts in India in introducing anti-dumping duties on products that could harm domestic industries.
But, as commerce minister Nirmala Sitharaman says, ahead of any anti-dumping action research and inquiry on it take up to 18 months. Scrutiny leading to anti-dumping measures relates to establishing beyond challenge that the targeted exporting country was indulging in direct and unapparent subsidisation of products with the objective purpose of selling these abroad.
New Delhi admits in the intervening long period between the filing of an application by a domestic industry to the designated authority in the department of commerce and the levy of anti-dumping duty by the finance ministry that much injury could be caused to the industry constituents concerned. As experiences here and in other similarly placed countries will bear it out, it is beyond the capacity of the government alone to hasten the process of data and facts collection on the basis of which anti-dumping steps could be initiated.
The sooner a meaningful partnership between the commerce ministry and the industry materialises, the better it will be for Indian steel which remains down in the dumps largely due to large imports deluging the local market and thereby hurting prices. No wonder, as the managing director of Tata Steel, T V Narendran points out steel prices in India are down 40 per cent in the past year and a half against global decline of 30 per cent. Hot-rolled steel prices here fell 26 per cent in the past 12 months alone. The villain of the piece in the eyes of every country from India to the US owning 'injured' steel industries with their losses mounting is China. There, a shrinking market and a big surplus capacity are forcing Chinese steelmakers to export aggressively at prices unarguably made possible by state subsidies.
A weaker renminbi trading at a four-year low following the country's central bank bringing its reference rate to the lowest level since 2011 is also aiding Chinese export. Globally, steel prices are also impacted by significant exports by other surplus countries such as South Korea, Japan and Russia. China alone had exported 101.7 million tonnes (mt) till November and when the December numbers are in, the total will exceed last year's exports of 93.78 mt by a long margin.
Investment banker Macquarie gives the grim warning that China's annual steel exports will remain in excess of 100 mt at least till the end of the decade. A cause for concern here is that the steel production fall in China remains less than the forecast demand shrinkage. The World Steel Association says Chinese steel demand in 2016 will fall by another two per cent to 672.2 mt on the back of 3.5 per cent contraction last year to 685 mt and 3.3 per cent in 2014 to 710.8 mt. But, the country's production shrank by only 2.2 per cent to 738.38 mt between January and November from a year earlier.
Now, Beijing is to charge export tax at a reduced rate on steel billet and pig iron.
What also is contributing to predatory export prices of steel by the world's biggest producer are economic slowdown in China and deceleration in global trade. Narendran believes India's steel demand benefiting from 'higher economic activity' will grow seven per cent in 2016.
But, the fear remains a portion of that incremental demand will be lost to imports. Unless of course suitable tariff and non-tariff barriers are put in place to staunch foreign origin steel flooding our market. Between April and November, Indian steel imports were up 34.4 per cent to 7.446 mt from a year earlier. Mercifully, justification of 'curbs' for a 'level-playing field' for local producers has come from steel secretary Aruna Sundararajan, who says minimum import price has to cover 45-50 per cent of steel coming from abroad.
But, as commerce minister Nirmala Sitharaman says, ahead of any anti-dumping action research and inquiry on it take up to 18 months. Scrutiny leading to anti-dumping measures relates to establishing beyond challenge that the targeted exporting country was indulging in direct and unapparent subsidisation of products with the objective purpose of selling these abroad.
New Delhi admits in the intervening long period between the filing of an application by a domestic industry to the designated authority in the department of commerce and the levy of anti-dumping duty by the finance ministry that much injury could be caused to the industry constituents concerned. As experiences here and in other similarly placed countries will bear it out, it is beyond the capacity of the government alone to hasten the process of data and facts collection on the basis of which anti-dumping steps could be initiated.
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How could, then, the injured industry get relief earlier? Sitharaman has said in a TV interview, "We want a system whereby we are able to do it (research and inquiry) faster." In this exercise, the industry should ideally partner the commerce ministry. Admitting the ministry is not equipped to "collect enough such data with which we can take decisions", she recommends "the industry and us will have to work much more methodically" on anti-dumping enquiry.
The sooner a meaningful partnership between the commerce ministry and the industry materialises, the better it will be for Indian steel which remains down in the dumps largely due to large imports deluging the local market and thereby hurting prices. No wonder, as the managing director of Tata Steel, T V Narendran points out steel prices in India are down 40 per cent in the past year and a half against global decline of 30 per cent. Hot-rolled steel prices here fell 26 per cent in the past 12 months alone. The villain of the piece in the eyes of every country from India to the US owning 'injured' steel industries with their losses mounting is China. There, a shrinking market and a big surplus capacity are forcing Chinese steelmakers to export aggressively at prices unarguably made possible by state subsidies.
A weaker renminbi trading at a four-year low following the country's central bank bringing its reference rate to the lowest level since 2011 is also aiding Chinese export. Globally, steel prices are also impacted by significant exports by other surplus countries such as South Korea, Japan and Russia. China alone had exported 101.7 million tonnes (mt) till November and when the December numbers are in, the total will exceed last year's exports of 93.78 mt by a long margin.
Investment banker Macquarie gives the grim warning that China's annual steel exports will remain in excess of 100 mt at least till the end of the decade. A cause for concern here is that the steel production fall in China remains less than the forecast demand shrinkage. The World Steel Association says Chinese steel demand in 2016 will fall by another two per cent to 672.2 mt on the back of 3.5 per cent contraction last year to 685 mt and 3.3 per cent in 2014 to 710.8 mt. But, the country's production shrank by only 2.2 per cent to 738.38 mt between January and November from a year earlier.
Now, Beijing is to charge export tax at a reduced rate on steel billet and pig iron.
What also is contributing to predatory export prices of steel by the world's biggest producer are economic slowdown in China and deceleration in global trade. Narendran believes India's steel demand benefiting from 'higher economic activity' will grow seven per cent in 2016.
But, the fear remains a portion of that incremental demand will be lost to imports. Unless of course suitable tariff and non-tariff barriers are put in place to staunch foreign origin steel flooding our market. Between April and November, Indian steel imports were up 34.4 per cent to 7.446 mt from a year earlier. Mercifully, justification of 'curbs' for a 'level-playing field' for local producers has come from steel secretary Aruna Sundararajan, who says minimum import price has to cover 45-50 per cent of steel coming from abroad.
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