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GTRI calls for steel sector assessment before safeguard duty imposition
Industry News- Jan 03,25
The Directorate General of Trade Remedies (DGTR) began an investigation last month into imports of ‘Non-Alloy and Alloy Steel Flat Products,’ which are used in various industries such as construction, automotive, and electrical panels.
The Global Trade Research Initiative (GTRI) has urged for a thorough evaluation of the Indian steel industry to assess the impact of existing import measures before implementing the proposed safeguard duty. A report from GTRI highlights that the Ministry of Commerce's ongoing investigation into increased imports of certain steel products suffers from significant technical flaws, such as focusing on products with minimal import surges and incorrectly applying global safeguards.
GTRI emphasises that any new measures should be based on a clear understanding of how current import policies are affecting the industry and the broader economy. “A comprehensive study of the steel industry's state is needed to assess how proposed and existing import measures impact costs, economic growth, and jobs. Only after this assessment should any new actions be taken,” said Ajay Srivastava, Founder, GTRI.
The report also criticised the existing system, which includes Quality Control Orders (QCO), the Steel Import Monitoring System (SIMS), and No Objection Certificate (NOC) requirements, calling it "overly complex and inefficient." GTRI recommends a high-level review to simplify these processes and make compliance automatic and more efficient. It also suggests that the licensing process for foreign manufacturers be streamlined, potentially through collaboration with international labs for quality control.
The Directorate General of Trade Remedies (DGTR) began an investigation last month into imports of ‘Non-Alloy and Alloy Steel Flat Products,’ which are used in various industries such as construction, automotive, and electrical panels. MSME exporters from the engineering sector have expressed concerns that additional duties on steel imports would make domestic products uncompetitive and harm India’s outbound shipments.
The Indian Steel Association, representing major steel producers such as ArcelorMittal Nippon Steel India and JSW Steel, has filed a request for the imposition of safeguard duties on these imports under the Customs Tariff Act, 1975. Safeguard duties are trade measures designed to protect domestic industries from a surge in imports and are available to World Trade Organization (WTO) members.
The GTRI report argues that since most imports come from Free Trade Agreement (FTA) partners or China, the investigation should consider FTA-specific safeguards and anti-dumping measures targeting China. Using global safeguards may lead to challenges at the WTO, the report warns, citing the possibility of incomplete case details being shared with the DGTR by domestic industry players.
The report also pointed out that steel flat products are essential to India’s economy, serving as critical inputs across various sectors. India’s crude steel production increased from 109.14 million tons in 2019-20 to 144.04 million tons in 2023-24, with consumption rising from 100.17 million tons to 136.25 million tons in the same period. In FY2024, India met 94% of its steel demand through domestic production, with imports accounting for only 6%.
(Business Standard)
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