DG Safeguards Recommends 20% Safeguard Duty on HR Coils
AN application has been filed before the DG, Safeguards on 27th July, 2015 under Rule 5 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 by M/S Steel Authority of India Limited; M/S Essar Steel India Limited, and M/S JSW Steel Limited for imposition of Safeguard Duty on imports of "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more", into India to protect the domestic producers against serious injury/threat of serious injury caused by the increased imports of the product into India. The domestic industry has also requested for imposition of provisional safeguard duty in view of steep deterioration in performance of the domestic industry as a result of increased imports of the product.
The applicant has pointed out that Steel manufacturers in a number of countries including China PR, Russia, Ukraine have developed huge capacities to cater to demand of steel by developed countries and rest of the world. Most of the developed countries that were traditionally the biggest importers of steel such as United States and the European Union have reduced their dependence on imported steel. This development adversely affected exports of steel from China PR, Russia, Ukraine etc. to developed countries. Manufacturers in these countries had to think of ways to dispose off their production. India happened to be the natural choice for these manufacturers for multiple reasons.
World crude steel capacity at 2351 million tons as on 31 December 2014 has reached a level far in excess of global demand by almost 30% resulting in growing urge to export the surplus steel to countries like India that have good demand.
India, with relatively better demand prospects (domestic demand up by 3.1%) and high domestic prices, has remained an attraction for these steel surplus economies to channelize their excess capacities.
The DG, Safeguards has concluded that that increased imports of the product into India have caused and threatened to cause serious injury to the domestic industry/ producers. There exist critical circumstances, where any delay in application for provisional Safeguard measures would cause damage which it would be difficult to repair, necessitating immediate application of provisional Safeguard duty for period of 200 days, pending final determination of serious injury and threat of serious injury. Considering the average cost of sales of the product by the domestic producers (confidential), a reasonable return on cost of sales excluding interest, the present level of import duties and present average import prices,provisional Safeguard Duty at the rate of 20% (Twenty percent) ad valorem for 200 days which is considered to be the minimum required to protect the interest of domestic industry, is recommended to be imposed on imports of the product.