Indian stainless producers seek restoration of CVD on imports from China, Indonesia

Friday, 10 December 2021 13:46:55 (GMT+3)   |   Kolkata

The Indian government needs to restore countervailing duty (CVD) on imports of stainless steel from China and Indonesia in the national budget for 2022-23 scheduled to be placed before parliament in February, a statement from the Indian Stainless Steel Development Association (ISSDA) said on Friday, December 10.

According to ISSDA, the decision to suspend the CVD in the Union Budget 2021-22 has led to a surge in imports from Indonesia and China as was anticipated and imports are being driven by Chinese companies operating from Indonesia.

The CVD on imports from both countries was imposed after a detailed investigation by the Directorate General for Trade Remedies (DGTR), where the existence of non-WTO-compliant subsidies was established.

The apparent reason for duty withdrawal was price control, but it has not served its purpose due to the overall commodity super cycle, which also inflated raw material prices. Rising imports have adversely affected the small and medium-scale stainless steel producers and dampened the sentiment for further investment in the stainless steel industry, ISSDA said.

Import intensity for the stainless steel flat product market is five times, at about 25 percent against 5-6 percent for the overall steel industry. CVD was suspended for a period of nine months in the Union Budget 2021-22, and subsequently extended up to 31 January, 2022, ISSDA noted.

It said that at the current pace of imports and the resultant disincentive to the domestic industry, Indonesia is poised to unseat India as the second largest producer of stainless steel in the world.

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