Govt initiates review of CVD imposition on stainless steel
NEW DELHI : The Prime Minister’s Office (PMO) has initiated discussions on the potential imposition of countervailing duty (CVD) on stainless steel, raising hopes within the industry that such an action will curb cheap imports from China and support small and medium producers in India, two people familiar with the development said. The PMO has started talks with the industry and the ministries of steel and commerce, the people said, requesting anonymity. “The PMO has sought details on the impact of not implementing CVD on local producers," one of the two people said.
The PMO intervened after the finance ministry ruled out imposing the duty to offset the effects of subsidies provided by foreign governments to their producers despite the steel and commerce ministries supporting the implementation, Mint reported on 2 July. The PMO is concerned about the impact of cheaper imports on local producers. Industry data showed that small and medium enterprises (SMEs) manufacturing 200 series stainless steel flat products, the product being dumped by Chinese producers, are operating at only 30% of their capacity.
By the end of March, these enterprises were utilizing less than a third of their 1.5 million tonnes (mt) capacity, the lowest in the past six years. As cheap imports flood the market, domestic steelmakers, especially smaller ones, are freezing hiring and expansion plans and resorting to commodity trading. India had previously imposed CVD on steel, but removed it in the Union Budget 2021-22.
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