It was supposed to be a test case for the stainless steel industry of India.
One of the country’s leading steel makers, Jindal Stainless Ltd. (JSL), applied to the government for the imposition of a safeguard duty on foreign stainless steel, but the Directorate General of Safeguards (DGS) rejected the application, much to the consternation of JSL and the rest of India’s stainless steel industry.
The DGS falls under the Finance Ministry’s Department of Revenue. In its order, the DGS ruled JSL had failed to prove that there was “injury to the domestic industry as a result of the cheap imports.”
A JSL spokesperson told The Economic Times that the company was disappointed with the ruling.
“While it has a ‘Make in India’ campaign, the ground reality is turning out to be different,” JSL said in a statement. “Dumping of items from China has seen a 100% jump in the past year to two lakh tons. The situation is more likely to be `Make in China’ and ‘Trade in India,'” a spokesperson said.
For more than a year now, stainless steel manufacturers in India, and even representative trade bodies and advertising industry associations such as the Federation of Indian Chambers of Commerce and Industry, have been recommending to the government, time and again, impose an anti-dumping duty on imports of all stainless steel flat products, to protect domestic producers from loss. As reported by MetalMiner, cheap imports from the Association of Southeast Asian Nations (ASEAN) and free trade agreement (FTA) nations had led domestic steel companies to cut prices to about 7-10% below their cost of production.
JSL claimed in its application that the safeguard duty be imposed on cold-rolled flat products of stainless steel chromium series 400 to protect the domestic producer of this product against “serious injury from imports.”
The DGS is understood to have checked written submissions from representatives of Posco of South Korea, Maruti Suzuki, Nippon Steel, Nisshin Steel, Sumikin Stainless, among others, before arriving at its decision.
The DGS ruled that the injury claimed by JSL was not due to imports but the latter’s own problems such as high startup costs at its new plant in Odisha and excess capacity leading to higher inventory.
Indian consumers buy about 2.3 million metric tons of stainless steel a year, out of which imports accounted for 0.3 mmt, comprising mostly automotive steels.
The DGS decision on JSL’s case is seen as puzzling because a few weeks ago, it was reported in the Indian media that the directorate general for anti–dumping & allied duties had recommended the union ministry of commerce levy an anti–dumping duty on hot-rolled flat stainless steel imports from China, Malaysia and Korea.
One of the beneficiaries of this would have JSL and even the state-run Steel Authority of India Ltd.
The stainless steel industry estimates import from the three countries contributes up to 30% of India’s domestic demand, of which hot-rolled flat shares are the largest.
India’s steel imports from China had nearly tripled during the April-January 2015 period of this fiscal year to more than 29 lakh tons. India’s Parliament was informed by the Junior Steel Minister recently. The country had imported 10.88 lakh tons of steel comprising 6.46 lakh tons of carbon steel and 441.70 lakh tons of alloy/stainless during the entire 2013-14 fiscal.