New Delhi's Bold Move to Protect Local Steel Producers

In a significant step to safeguard the domestic steel industry from the adverse effects of a sudden surge in imports, the Indian Commerce Ministry has recommended imposing a 12% safeguard duty on specific steel products. This measure, proposed for a duration of 200 days, aims to shield local manufacturers from the competitive pressures of international markets.

Understanding the Rationale Behind the Duty

The Directorate General of Trade Remedies (DGTR), a key investigative body under the commerce ministry, highlighted the necessity of this provisional safeguard duty. According to the DGTR, the duty is essential to eliminate serious injury and threats posed to the domestic steel industry by the influx of imports. The investigation was initiated following a petition by the Indian Steel Association (ISA), representing major domestic producers, who reported significant harm due to increased imports.

Global Trade Dynamics and India's Response

The report also sheds light on the global trade dynamics affecting the steel industry, pointing out that trade diversion due to protective measures by the US has been a major factor behind the surge in imports. In response, the European Union imposed a 25% safeguard duty in 2018, with several other countries following suit. India's proposed duty is seen as a measure to counter potential trade diversion and protect its domestic industry from international competition.

The DGTR has invited comments on its preliminary findings from interested parties within 30 days, with a hearing scheduled before making a final decision. This move has sparked discussions among industry experts, with some raising concerns over procedural and economic inconsistencies, as well as the potential for international trade conflicts.