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ISSDA concerns on revocation of duties on stainless steel imports
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SME Times News Bureau | 25 Feb, 2021
Indian Stainless Steel Development Association (ISSDA), the country's
apex stainless steel body, has voiced concerns about the impending
adverse impact on domestic industry due to the temporary revocation of
trade remedial duties on importing stainless steel, as announced in this
year's Union Budget.
ISSDA, along with four major associations
representing MSME stainless steel producers, namely the Wazirpur
Industrial Estate Welfare Society, Delhi; Rajasthan Stainless Steel
Re-rollers Association, Jodhpur, Rajasthan; Jagadhri Stainless Steel
Re-roller Association, Haryana; and Stainless Steel Re-rollers
Association, Ahmedabad, Gujarat has urged the government to reconsider
this step as it will distort the domestic market by flooding it with
subsidised stainless steel from China and Indonesia, and will put
several MSME players on the verge of bankruptcy.
Presenting the
Budget proposals for 2021-22 in Parliament on February 1, Finance
Minister Nirmala Sitharaman announced that import duties on a host of
steel items were being reduced to prevent hardening of metal prices in
the country. Also, the Budget temporarily revoked (commencing from
February 2 till September 30, 2021) countervailing duty on imports of
Certain Hot Rolled and Cold Rolled Stainless Steel Flat Products,
originating in or exported from China.
Also, provisional
countervailing duty has been revoked on imports of flat products of
stainless steel, originating in or exported from Indonesia. The
anti-dumping duty on certain grades of Cold-Rolled Flat Products of
stainless steel has also been discontinued.
"The government
reversed six trade remedies out of which three relate to stainless
steel, which is just 3 per cent of overall steel industry in India.
Therefore, it has disproportionately impacted stainless steel, including
its MSME sector, and considerably dipped the market sentiment," K.K.
Pahuja, President, ISSDA said.
"It is noteworthy that MSME sector
constitutes about 35 per cent of the domestic stainless steel industry,
spread across the country, and is a major supplier for utensils and
household segments. However, the installed capacity for manufacturing
stainless steel in the MSME sector is 15 lakh tonnes, with less than 50
per cent being utilised. Keeping this in mind, a potential market
brimming with unregulated and cheap imports of Chinese stainless-steel
goods is expected to make MSME players go bankrupt or turn them into
traders," he added.
The industry fears that the demand generated
by a growth-oriented Budget may be captured by cheap dumped imports by
Chinese companies, in and out of China. This will further have an
adverse impact on prospective investment in the domestic industry,
which has been in financial stress for more than a decade and will lead
to loss of employment.
"This move is poised to drift away from
'Make in India' stance of the government, while leaving the domestic
industry at the mercy of foreign players instead of being Aatmanirbhar,"
Pahuja said.
While China has over 30 per cent surplus capacity
for stainless steel production, huge capacity additions backed by
Chinese investments have brought the installed production capacity of
Indonesia to 30 lakh tonnes in the last 2-3 years, along with an
additional 25 lakh tonne capacity in the pipeline.
Interestingly,
Indonesia's domestic consumption is a mere 0.2 lakh tonnes.
Consequentially, the two nations have been dumping subsidised and
substandard stainless steel products in India and other global economies
in heavy volumes and unregulated manner in the past several years.
According
to ISSDA, China and Indonesia are also known to provide non-WTO
compliant subsidies to the tune of 20-30 per cent to their domestic
manufacturers, rendering the global stainless steel market significantly
destabilised. Consequentially, all economies have countered this
irrational dumping by enforcing additional trade remedial duties.
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