DGTR Recommends 3-Year Safeguard Duty on Steel Imports to Protect Local Industry

The Directorate General of Trade Remedies (DGTR) has recommended a safeguard duty on imports of certain flat steel products for three years to protect the domestic industry. The duty will be 12% in the first year, 11.5% in the second, and 11% in the third year. The DGTR cited a recent surge in imports from countries such as China, South Korea, and Vietnam as a threat to the domestic industry. The finance ministry will impose the duty.

The Directorate General of Trade Remedies (DGTR) has recommended a safeguard duty on imports of certain flat steel products for three years, aiming to shield domestic manufacturers from a surge in inbound shipments. The recommended duty starts at 12% in the first year, decreasing to 11.5% in the second year and 11% in the third year [1].

The DGTR cited a recent surge in imports from countries such as China, South Korea, and Vietnam as a threat to the domestic industry. The preliminary findings of the probe, initiated on a complaint by the Indian Steel Association, revealed that the sudden increase in imports was causing significant harm to domestic producers [2].

The DGTR's recommendation comes after the government had imposed a provisional 12% safeguard duty in April for 200 days. The final safeguard duty will be imposed by the finance ministry and will apply to specific steel products, including hot-rolled coils and sheets, hot-rolled mill plates, cold-rolled coils and sheets, color-coated steel products, and metallic coated steel coils [3].

The Indian Steel Association had alleged that the surge in imports posed a serious threat to the domestic industry. The association represents key players such as JSW Steel Limited, ArcelorMittal Nippon Steel India Limited, and Steel Authority of India [2].

The DGTR's recommendation is expected to provide relief to Indian steelmakers facing pricing pressure from low-cost imports. However, the imposition of duties may lead to higher landed costs for importers and potentially impact downstream users. The exact impact on downstream product prices is expected to be negligible, ranging within 0.002-0.5% [2].

The recommendation is expected to signal India's continued vigilance in using trade remedies to protect strategic industries. At the same time, it may lead to increased scrutiny of trade practices and potential retaliatory measures from other countries [2].

References:
[1] https://timesofindia.indiatimes.com/business/india-business/steel-safeguard-duty-dgtr-backs-3-year-levy-on-flat-steel-imports-industry-groups-divided/articleshow/123347003.cms
[2] https://www.bigmint.co/insights/detail/india-imposes-anti-dumping-duty-on-hot-rolled-flat-steel-imports-from-vietnam-672313
[3] https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/dgtr-recommends-3-year-safeguard-duty-on-steel-imports-to-protect-local-industry/articleshow/123350565.cms