DGTR initiates probe into 'steel flat product' imports amid concerns

India has initiated a probe into an alleged increase in imports of certain steel flat products into the country following a complaint from the Indian Steel Association, according to a government notification.

The Directorate General of Trade Remedies (DGTR), under the commerce ministry, has started the investigation into imports of 'Non-Alloy and Alloy Steel Flat Products', used in various industries, including fabrication, pipe making, construction, capital goods, auto, tractors, bicycles, and electrical panels.

According to the notification of the DGTR, the Indian Steel Association, on behalf of its members - ArcelorMittal Nippon Steel India, AMNS Khopoli, JSW Steel, JSW Steel Coated Products, Bhushan Power & Steel, Jindal Steel and Power, Steel Authority of India - has filed an application under the customs tariff Act, 1975.

They have sought imposition of safeguard duty on imports of these products into India.

The applicant has alleged that there is a "recent, sudden, sharp and significant" increase in the volume of imports, which has caused "significant" injury to the domestic industry in India," it said.

It has also alleged that the imports have taken place to cause serious injury to the industry.

"They have sought imposition of safeguard duties to protect the domestic industry engaged in the production of like articles or directly competitive products from such serious injury and threat thereof being caused by the imports," it said.

The product under consideration of the probe includes hot rolled (HR) coils, sheets and plates; HR plate mill plates; cold rolled (CR) coils and sheets; metallic coated steel coils and sheets; and colour coated coils and sheets.

"On the basis of the duly substantiated application filed by the applicant, and having satisfied itself on the basis of evidence provided therein, the authority (DGTR) considers that there is sufficient prima facie evidence to justify the initiation of the investigation," the DGTR notification said.

As part of the investigation, the directorate would determine whether unforeseen developments have resulted in a sudden, sharp and significant increase in imports in recent periods, and whether such imports have caused serious injury or pose a threat of serious injury to the domestic industry.

The applicant has requested for the imposition of provisional measures citing the existence of critical circumstances. It has asked to impose the duty for four years.

For the purpose of the probe, it will consider the imports happened during October 2023 to September 2024.

The authority will also examine data pertaining to 2021-24.

Safeguard measures in the form of duty of quantitative restrictions are trade remedies available to the World Trade Organization member-countries. They are imposed to provide a level-playing field to domestic players in case of sudden and significant increase in imports of a product.

According to the industry, the existence of significant excess capacity far exceeding domestic consumption in China, Japan and South Korea have arisen due to slowing demand in those countries.

After completing the probe, the DGTR can recommend imposition of the duty to the Board of Safeguard, which will be applicable to all trading partners of India.

A final call on imposing the duty can be taken by the finance ministry on recommendations of Ministry of Commerce.

On December 2, the steel ministry in a meeting with the commerce department had proposed a 25 per cent safeguard duty on certain steel products imported into the country. Steel Minister H D Kumaraswamy and Commerce and Industry Minister Piyush Goyal were present in the meeting.

While some big domestic steel makers are advocating for imposition of the duty, the user industry is strongly against it as the duty would push raw material prices, impacting their competitiveness.

Domestic steel players have raised concerns over increasing imports of steel from nations like China.

MSME exporters from the engineering sector have stated that any move to impose additional duties on steel imports would make domestic products uncompetitive and impact the country's outbound shipments from the sector.

Hand Tool Association Chairman S C Ralhan said that the MSME engineering exporters are already facing problems on the liquidity front and high prices of steel in the domestic market.

Think tank Global Trade Research Initiative (GTRI) in its report has claimed that India's steel imports are neither excessive nor unwarranted as half of these imports are critical raw materials for domestic production, while 40 per cent consist of specialised items that India does not produce in sufficient quantities.

Safeguard measure is used when imports of a particular product increase unexpectedly to a point that they cause or threaten to cause serious injury to domestic producers. These measures give domestic producers a period of grace to become more competitive vis-a-vis imports.

These duties are applicable against all the countries with uniform rate of duty unlike the anti-dumping duties.

Normal time allowed by the statute for conclusion of investigation and submission of final findings is eight months from the date of initiation of the investigation or within such extended period as determined by the central government.