In a major relief to domestic steel producers, the government on Monday announced the levy of 20 per cent safeguards duty on steel imports of certain specified standards.
Last week The Directorate General of Safeguards (DGS) on Monday said it is likely to impose a safeguard duty on imported hot-rolled steel flats and coils of 600 mm or more width, in order to protect domestic steel makers from dumping of the product by exporters from countries such as China, South Korea, Japan and Russia (See: India weighs safeguard duty on steel as imports surge).
The levy of 20-per cent safeguard duty is applicable on imports of hot-rolled flat products of non-alloy and alloy steel in coils of width of 600 mm or above.
The duty, which is based on the value of the product concerned, will be valid for a period of 200 days, a finance ministry release stated.
The safeguards duty, announced by the Director General of Safeguards, followed investigations into alleged imports of cheap products and preliminary finding of injury caused to domestic industry.
The safeguards duty is being imposed amidst a downturn in global metal prices, which has already dented the wholesale price index for 'basic metals, alloys and metal products' – which forced a 1.9 per cent downward revision in August.
While steel prices have been falling since October 2014, the decline accelerated since June this year amidst a global slump when producers started dumping steel on other markets.
The Directorate General of Safeguards had, on 9 September, recommended imposition of safeguard duty on hot-rolled flat steel products for 200 days. Hot-rolled steel products account for almost 80 per cent of India's steel imports.
Meanwhile, domestic producers of aluminium met finance minister Arun Jaitley on Sunday to seek relief, even as it had started cutting production.
Steel makers have managed to get a safeguard duty even while the market share of imports remains at 12
The aluminium industry claims that it is worse off than the steel industry as cheaper imports have taken a market share of 56 per cent against the 12 per cent share of imported products for the steel industry.