Making a strong case for safeguard duty on vital steel imports, the Safeguards Directorate has maintained that cheap inflows from China and other countries is hurting the domestic industry.
The Directorate, in its recommendation to the inter- ministerial board on safeguard, has sought the imposition of 25 per cent safeguard duty on imports of items like hot-rolled coils, sheets and strips, shipped below $500 per tonne to India, an official said.
Earlier in May, the safeguard board headed by Commerce Secretary had sent the proposal for the duty back to the directorate stating that the views of the user industries should also be incorporated.
"In its recent recommendation, the directorate has incorporated the views of user industries," a source said, adding, the directorate has also kept open the option for the board to modify the proposed duty structure if the need be.
The recommendation of Directorate General of Safeguards (DGS) is based on its findings that surge in imports of flat steel items, mainly used by auto and white goods sector, has caused "serious injury" to domestic steel makers, he added.
In May alone, India's steel imports surged by 21 per cent to 5.28 lakh tonnes against 4.35 lakh tonnes. Of the total imports, the shipment from CIS countries contributed to 28 per cent, as per Steel Ministry's data.Concerned over rising steel imports during the last few months, two private producers — Essar Steel and Ispat Industries — had filed a petition for imposing safeguard duty and the same was supported by SAIL and JSW Steel.
The applicants along with supporting companies accounted for nearly 80 per cent of the country's total steel production between April 2008 and February 2009.
In the petition, the companies said the surge in steel imports has led to a steep decline in their sales volumes and lower capacity utilisation of the plants.
Even as the domestic steel industry is pushing for the safeguard duty, Steel Minister Virbhadra Singh had yesterday said the inflow of steel products to India were "not alarming enough" for the ministry to be worried.
"I do not think dumping which can hamper the growth of the Indian steel industry is happening at present," Singh said while outlining the ministry's 20-point agenda for the next 100 days.
