India plans ‘safeguard duty’ to protect steel companies from cheap imports
Subscribe to enjoy similar stories. New Delhi: The Indian government is considering a safeguard duty on steel imports to curb the influx of cheap steel into the country and protect the domestic industry. Imported steel, especially from China, costs about 30% less than domestic steel even with customs duty factored in, according to industry estimates.
Discussions on the duty will begin once the steel industry proposes a duty structure to protect them from such imports. Companies say cheaper imports—not just from China but also countries such as Japan and South Korea—have hit their bottom lines and could hinder their expansion plans, two officials told Mint. “The proposal from the industry is likely to come in two weeks," said a senior government official, who did not wish to be identified.
After receiving the proposal, the Directorate General of Safeguards (DGS) will start to investigate the impact cheaper steel imports on the domestic industry. “Once the impact is ascertained, DGS will recommend the imposition of duty, which can be done retrospectively," said one of the two officials cited above. The official explained that the investigation may take four to six months, but the duty will be imposed from the date the probe began.
The duty may be in the range of 8-12%, officials said. The industry, however, wants it to be around 25%—similar to that imposed by the US to restrict imports from China. Also read: India's steel prices plunge to four-year low, most affordable since covid-19 pandemic The safeguard duty is a temporary measure and can enforced for a maximum of two years.
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