NEW DELHI: The commerce ministry has recommended a 12% safeguard duty on some specific steel products for 200 days to protect the domestic industry, which has been facing the brunt of a sudden spike in imports.
“…Authority considers that a provisional safeguard duty of 12% will be appropriate to eliminate serious injury and threat to the domestic industry,” the Directorate General of Trade Remedies (DGTR), an investigative arm of the commerce ministry, said in its report. The proposed duty would be applicable on non-alloy and alloy steel flat products.
The investigation was launched after a petition was filed by the Indian Steel Association (ISA), representing some leading domestic producers, alleging a sharp increase in imports causing serious harm to the domestic steel industry.
The DGTR in its report said trade diversion due to protective measures imposed by the US has been a major cause behind surge in imports. To counter the effect of trade diversion from the US into European Union (EU) countries, EU imposed a 25% safeguard duty in 2018. It also said several other countries like South Africa, Turkey, Vietnam, Malaysia, Tunisia have also raised barriers for import of steel products.
“To counter the trade diversion from the US as well as any possible diversion from other countries that have put in place import barriers to counter trade diversion any protective measure by India shall be at a level adequate to ward off trade diversion,” according to the report.
The authority has invited comments on preliminary findings from all interested parties within 30 days and will have a hearing before making a final decision.
“The preliminary report suggests a strong push towards imposing safeguard duties on steel imports to protect domestic manufacturers,” said Ajay Srivastava, head of think tank GTRI. “However, procedural shortcomings, economic inconsistencies, and international trade conflicts raise significant concerns about the legitimacy of the proposed measures. The final decision will depend on further investigations, stakeholder responses, and compliance with international trade norms. If imposed, the safeguard duties may face challenges at both domestic and global trade forums,” said Srivastava.