The European Union (EU) regulator has launched an investigation into imports of subsidised stainless steel wires from India, following an anti-dumping complaint from the European steel producers' group Eurofer.
The European Commission (EC) said over the weekend that it has received a complaint from Eurofer alleging that Indian steelmakers receive a number of subsidies from their central and state governments and are selling stainless steel wires in the 27-nation EU at below-market prices hurting European steelmakers.
The EC said the complaint was lodged on 28 June 2012 by Eurofer on behalf of producers representing more than 50 per cent of the EU steelmakers that produce stainless steel wires.
The Brussels-based regulator said it has launched a formal investigation into the complaint and has invited the Indian government for talks to find out whether it grants subsidies to their steelmakers for making stainless steel wires.
The EC said that Eurofer has provided evidence that imports of stainless steel wires from India has increased in terms of market share in the EU, which has had a negative impact on the quantities sold, the level of prices charged and the market share held by the EU steelmakers.
The Eurofer alleges that the subsidies consist of the duty entitlement passbook scheme, the advance authorisation scheme, schemes conferring benefits to industries located in special economic zones/export oriented units, the export promotion capital goods scheme, pre-shipment and post-shipment export financing, loan guarantees from the Government of India.
It also includes exemption of export credit from interest taxes, duty-free replenishment certificate scheme/duty-free import authorisation scheme, duty drawback scheme, income tax incentive for research and development, focus product scheme and regional subsidies by the states of Maharashtra and Gujarat.
The complaint from Eurofer appears to be in retaliation to the Indian finance ministry imposing anti-dumping duty on imports of hot-rolled flat products of stainless steel from the EU, and three other countries, in November 2011, in order to protect the domestic industry from cheap imports from abroad.