Rejecting contention of Vedanta Ltd and Hindalco, Directorate General of Safeguard today said there was no need to impose safeguard duty on import of certain aluminium products as there is no threat of "serious injury" to the domestic industry due to the shipments.
The DGS, under the Finance Ministry, in its final findings on 'safeguard investigation' concerning imports of 'Unwrought Aluminium (Aluminium not alloyed and Aluminium alloys)' said data shows that import is decreasing whereas production and sales of Domestic Industry (DI) has increased.
As LME prices have moved upwards from USD 1,563 during April, 2016 to USD 1,735 in November, 2016, domestic producers will get higher realisations. The depreciation of rupee is also working in their favour.
"There exists an injury to the DI but there exists no serious injury or threat of serious injury to the domestic industry...And hence no protection under the safeguard law is required," the DGS.
Moreover, the government has already provided relief to the DI, by increasing Custom duty on the product from 5 per cent to 7.5 per cent from March and hence safeguard duty on the product is "not recommended".
Vedanta Ltd, Bharat Aluminium Company Ltd (BALCO), and Hindalco Industries Ltd had moved the DGS for imposition of the safeguard duty on the imports of the product to protect the domestic producers against serious injury/threat of serious injury caused by the increased imports.
The DGS also noted that market share, production, domestic sales and productivity of DI have improved and capacity utilization is almost at 100 per cent.
Disclaimer: No Business Standard Journalist was involved in creation of this content
