Government Puts Safeguard Duty of 20% to check dumping of Steel products

Alarmed by the dumping of steel products by various steel producing countries into domestic market thereby impacting the local manufacturers, government of India has imposed 20% safeguard duty on various steel products. Government of India has issued notification whereby it has imposed provisional duty Ad-Valorem for a period of 200 days on hot-rolled flat products of Non-alloy and other alloy steel in coils of a width of 600 MM or more.

Importantly domestic steel industry has made representation to the Director General of Safeguard regarding the dumping of steel products into India, thereby increase in imports and “consequent injury to domestic industry.” Swiftly acting on this representation DG Safeguard has issued preliminary finding on September 9 and also recommended a provisional safeguard duty of 20% ad-valorem for a period of 200 days. For this necessary tweaking under Custom Tariff  Act 1975 has been done.

This recommendation was then examined by standing board of safeguard and forwarded it to government after vetting it, after which government has accepted the finding of DG Safeguard and issued the notification. Experts are of the view that this duty would be helpful in safeguarding the interest of domestic manufacturers only in short run but as the world is reeling under slowdown, dumping of steel would surely take place. Importantly steel manufacturers like Tata Steel, SAIL, JSW steel etc. are already reeling under lower demand on the domestic front and rising interest cost is already eating up their profits. In such as situation  cheap imports may create a havoc for the companies. Companies are asking for long term solution for this problem as 200 days period won’t be that significant for them.