DGTR to revisit anti-dumping rules amid surging Chinese steel imports

Consultations with stakeholders, including with the Ministry of Steel, are likely to get underway. This move, coming just ahead of the upcoming general elections, is an admission of sorts by the Department that the punitive measures taken so far are floundering.

The concerns raised by the domestic steel lobby focus largely on the Chinese non-alloy steel being imported in the country that is presumably being misdeclared as alloy steel, which otherwise is value-added and expensive steel, both in terms of usage and price.

The fresh study commissioned by the DGTR in the steel sector comes at a time when despite an across-the-board tariff hiking spree by the NDA government — covering over 400 items ranging from apples and almonds to cell phone parts and solar panels during the last 24 months — there is sobering realisation that pointed interventions such as anti-dumping duties in sectors such as steel and solar panels have largely failed in achieving results.

The complaints by the steel industry, which have been included as a submission before the parliamentary standing committee on commerce, cite the non-review of the anti-dumping duty in the backdrop of the fact that the raw material prices have gone up multiple times over the last 24 months.

Even as the cost of domestic steel production, based on which the anti-dumping duty reference price mechanisms have been formulated, are now completely different, nothing has been done to revise or rationalise the anti-dumping duty imposed for some time now, the industry has petitioned.

At the time of notification of existing anti-dumping duties in the steel sector, the DGAD had then considered the international prices vis-à-vis the prevailing domestic prices at that time and the reference price had been arrived at accordingly.

Over time, steel prices have appreciated globally.

Feedback from stakeholders is reflective of the fact that the reference prices that had been set earlier now need to be reviewed, as they might not be relevant in the current scenario considering the price appreciation in the sector. If import prices are higher than the existing reference price, there is no way to prevent imports till reference prices are reviewed upwards.

“There is a view that increase in the basic customs duty will not be able to check the imports arriving from countries with which India has Free Trade Agreements. Consequently, it is being contemplated that the current trade remedial measures (anti-dumping on products such as steel) be converted to fix duty rates in US dollar per tonne in lieu of existing reference prices,” an official involved in the exercise said.

Incidentally, the DGTR has initiated 888 investigations against imports from various countries so far, mainly pertaining to China, the EU, Republic of Korea, Chinese Taipei, Thailand, the US, Indonesia, Japan and Malaysia.

While steel and other metals are a major component of India’s anti-dumping action against China, the biggest product category in terms of cases is the chemical and petrochemicals sector, where 41 cases of anti-dumping duties are currently in force, according to government data.

Apart from steel, in the case of the solar power sector, the industry has been alleging increased imports of solar cells.

An application dated November 28, 2017, was filed before the Directorate General of Safeguards (DGS) on December 5, 2017, under Rule 5 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 by the Indian Solar Manufacturers Association (ISMA) on behalf of five Indian producers — Mundra Solar PV Limited, Indosolar Limited, Jupiter Solar Power Limited, Websol Energy Systems Limited and Helios Photo Voltaic Limited — seeking imposition of safeguard duty on imports of solar cells.

The DGTR, after completing the investigation, came to the conclusion that increased imports of solar cells, whether or not assembled in modules or panels into India, have caused “serious injury” and also “threaten to cause serious injury” to the domestic producers in India.

The DGTR recommended imposition of safeguard duty on imports of solar cells for two years vide final findings dated July 16, 2018. Imports from developing nations other than China and Malaysia were exempted from the Safeguard Duty up to certain limits.