 "Stainless steel makers want level playing field")
Healthy demand growth over the past several years and a forecast by the Indian Stainless Steel Development Association that the country will need 5.6 million tonnes of stainless steel by 2022 encouraged the likes of Jindal Stainless and Salem Steel to make large investments in new capacity.
Increasingly, big imports of stainless steel flat products, particularly from China, have left much of the domestic industry capacity idle. Unable to compete with imports what benefit from large dollops of subsidy by exporting countries, our producers are condemned to making losses.
Expectedly, there are denials of any dumping by China. Such protestations, however, sound hollow after the US Department of Commerce's recent preliminary determination that imports of stainless steel sheet and strip (SSSS) originating in China are benefiting from 'unfair' government subsidies.
What must not have been appreciated by the US is that except for one producer of SSSS, Shanxi Taigang, no other Chinese stainless steelmaker provided the information asked of them during the investigation. Imports of SSSS into the US from Shanxi Taigang were found to be carrying a subsidy margin of 57.3 per cent.
Indian stainless steel producers are bearing an identical brunt from imports of flat products from China as their peers in the US. From 304,856 tonnes in 2011-12, Indian imports of stainless steel were up to 532,033 tonnes in 2015-16. During this period, our imports from China jumped from 94,093 tonnes to 276,456 tonnes.
China's share in India's stainless steel imports last year stood at 52 per cent, up from 31 per cent five years ago. The local industry finds it disturbing that anti-dumping duties on stainless steel hot-and-cold rolled flat products despatched by China and some other countries are not proving effective in curbing the import surge.
Industry officials rue that importers here, in connivance with firms in exporting nations, have found ways to "circumvent paying anti-dumping duties" causing injury to local producers. The US import experience is no different from ours. China brought into play all its marketing skills, fair and unfair, to raise its SSSS exports to the US by a whopping 133 per cent between 2013 and 2015. It almost had half the share of the total US import of SSSS last year.
Among all steel import-hit countries, the US is the most pro-active in offering protection to its mills from arrivals of foreign origin steel products bearing subsidy in violation of World Trade Organisation rules. Indian stainless steelmakers think Delhi is more responsive in providing relief to carbon steel manufacturers, who also find imports denying them a significant share of local market and also keeping prices low.
They got some relief as the government raised import duty and introduced safeguard duty on hot-rolled coils and minimum import price on 173 steel products. Producers of stainless steel argue that as anti-dumping duties have not yielded the desired results, the correct step for the government will be to double the import duty to 15 per cent.
Whatever the industry's demand, the government will do its own inquiry before it acts. In duty revision, Delhi is careful in not compromising its image of a free trader to placate any interest group. But, in this instance, the demand is for a level-playing field.
For China and other exporting countries, India is a market of growing importance, where the demand for stainless steel should continue to grow at a "multiple of 1.4 or so of gross domestic product".
China, which in 2015 accounted for more than half the world stainless steel production of 41.5 mt, will continue to be left with much exportable surplus as domestic demand continues to fall, in the wake of the country migrating from credit-fuelled investment to consumption-led growth.
Last year saw a 13 per cent fall in China's flat stainless steel exports to 2.7 mt from 3.1 mt in 2014, amid an increasing number of trade protection measures the country faced. No credit is, however, due to India for shrinkage in Chinese exports.
Interestingly, China charges a higher duty on stainless steel import than India. More, unlike us, that country allows import of stainless steel making ingredients at nil duty.
Increasingly, big imports of stainless steel flat products, particularly from China, have left much of the domestic industry capacity idle. Unable to compete with imports what benefit from large dollops of subsidy by exporting countries, our producers are condemned to making losses.
Expectedly, there are denials of any dumping by China. Such protestations, however, sound hollow after the US Department of Commerce's recent preliminary determination that imports of stainless steel sheet and strip (SSSS) originating in China are benefiting from 'unfair' government subsidies.
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In a follow-up move, the US customs and border protection agency will start requiring importers to deposit with it countervailing duties at importation time. Such duties are initial tariffs on imports, slapped on the basis of affirmative investigations confirming subsidisation of items of exports at several governmental levels.
What must not have been appreciated by the US is that except for one producer of SSSS, Shanxi Taigang, no other Chinese stainless steelmaker provided the information asked of them during the investigation. Imports of SSSS into the US from Shanxi Taigang were found to be carrying a subsidy margin of 57.3 per cent.
Indian stainless steel producers are bearing an identical brunt from imports of flat products from China as their peers in the US. From 304,856 tonnes in 2011-12, Indian imports of stainless steel were up to 532,033 tonnes in 2015-16. During this period, our imports from China jumped from 94,093 tonnes to 276,456 tonnes.
China's share in India's stainless steel imports last year stood at 52 per cent, up from 31 per cent five years ago. The local industry finds it disturbing that anti-dumping duties on stainless steel hot-and-cold rolled flat products despatched by China and some other countries are not proving effective in curbing the import surge.
Industry officials rue that importers here, in connivance with firms in exporting nations, have found ways to "circumvent paying anti-dumping duties" causing injury to local producers. The US import experience is no different from ours. China brought into play all its marketing skills, fair and unfair, to raise its SSSS exports to the US by a whopping 133 per cent between 2013 and 2015. It almost had half the share of the total US import of SSSS last year.
Among all steel import-hit countries, the US is the most pro-active in offering protection to its mills from arrivals of foreign origin steel products bearing subsidy in violation of World Trade Organisation rules. Indian stainless steelmakers think Delhi is more responsive in providing relief to carbon steel manufacturers, who also find imports denying them a significant share of local market and also keeping prices low.
They got some relief as the government raised import duty and introduced safeguard duty on hot-rolled coils and minimum import price on 173 steel products. Producers of stainless steel argue that as anti-dumping duties have not yielded the desired results, the correct step for the government will be to double the import duty to 15 per cent.
Whatever the industry's demand, the government will do its own inquiry before it acts. In duty revision, Delhi is careful in not compromising its image of a free trader to placate any interest group. But, in this instance, the demand is for a level-playing field.
For China and other exporting countries, India is a market of growing importance, where the demand for stainless steel should continue to grow at a "multiple of 1.4 or so of gross domestic product".
China, which in 2015 accounted for more than half the world stainless steel production of 41.5 mt, will continue to be left with much exportable surplus as domestic demand continues to fall, in the wake of the country migrating from credit-fuelled investment to consumption-led growth.
Last year saw a 13 per cent fall in China's flat stainless steel exports to 2.7 mt from 3.1 mt in 2014, amid an increasing number of trade protection measures the country faced. No credit is, however, due to India for shrinkage in Chinese exports.
Interestingly, China charges a higher duty on stainless steel import than India. More, unlike us, that country allows import of stainless steel making ingredients at nil duty.