Slowly but surely, India seems to be shifting the goal posts on its minimum import price policy designed to protect the domestic steel industry.
India recently extended the anti-dumping duty on cold-rolled flat steel products from four nations, including China, Brazil and South Korea to guard the domestic steel industry from cheap imports for another two months. The duty was expected to expire after six months and was recently extended to give it a total duration of eight.
India had previously imposed a minimum import prices (MIP) to protect the steel industry and the cold-rolled duties came in addition to the MIP. The policy was described as a short-term emergency measure while anti-dumping duties are a long-term measure to protect the country’s trade.
Yet, according to a recent media report, India’s steel secretary Aruna Sharma said there would be no minimum import price (MIP) extension for 19 steel products.
How the MIP Started
India started imposing an anti-dumping duty of $474-$557 per metric ton on hot-rolled flat products of alloy and non-alloy steel imported from China, Japan, South Korea, Russia, Brazil and Indonesia in August.
There are other early signs of a perceptible shift in policy, too. A Press Trust of India (PTI) report quoted India’s Steel Minister Chaudhary Birendra Singh as saying the domestic steel industry must gear up to face global competition as protectionist measures “cannot continue indefinitely.”
In an article that he wrote the Minister, while not being very explicit about the government’s position on such protectionist measures and their continuity, said the Ministry of Steel had taken up the issues of tariff and non-tariff support measures for steel products which resulted in the imposition of an MIP, anti-dumping duties, safeguard duties and adjustment in rates for movement of freight over a period of time. These steps, he wrote, had ensured a level playing field for the Indian steel industry to grow and compete on equal terms with international steel companies.
There are some key players in the government including the Steel Minister who seem to be coming around to the point of view that India’s steel sector is on its way to becoming stable so a slow withdrawal of the protectionist measures must begin in order to make the industry globally competitive.
Changing the MIP
While this may not exactly be music to the ears of some of India’s key steel majors such as Tata Steel and JSW Steel, the Indian Government has, for now, left a window open, saying it would switch to following World Trade Organization-complaint norms on anti-dumping.
India has once again turned into a net exporter of steel; exports are now 58% higher as compared to last fiscal year.
To give relief to domestic steel producers against cheap inbound shipments, the MIP was first imposed last February on 173 steel products, but slowly the number was reduced.
In the most-recent round of anti-dumping duty impositions, the tax to be paid was redefined as the difference between the landed value of the steel products and $594 per mt.
The duty was imposed in August for six months on cold-rolled flat products of alloy or non-alloy steel from China, Japan, South Korea and Ukraine.
The Central Board of Excise and Customs (CBEC) amended the August 17 notification to extend the duties for two more months.