Indian stainless steel body urges imposition of surtax on Chinese imports

File photo

A body representing stainless steel developers of the country has written to the ministry of steel, requesting a protective surtax on imports of stainless steel products from China, to ensure a level-playing field for the domestic industry amidst increased imports situation.

A copy of the letter, written by Rajamani Krishnamurthi, chief of the Indian Stainless Steel Development Association (ISSDA), was seen by Moneycontrol. The letter, dated August 30, was addressed to Steel Secretary Sandeep Poundrik.

"Chinese producers benefit from substantial, non-WTO-compliant government subsidies and engage in practices that distort market conditions," Krishnamurthi wrote in the letter.

The association has requested the ministry to impose trade barriers like the recent surtax by the Canadian government.

Indian stainless steel players are bearing the brunt of heavy influx of cheaper Chinese imports, causing almost 30-35 percent of medium and small businesses in Gujarat to shut shop between July-September last year, Moneycontrol had reported earlier this year.

In 2023, stainless steel manufacturers had filed a petition, urging the government to impose countervailing duty (CVD) on Chinese products.

"The Canadian government has recently implemented a 25 percent surtax on imports of steel, including stainless steel, and aluminium products from China, effective October 15, 2024.... given these developments, the ISSDA believes that similar trade remedy measures would be highly beneficial for India's stainless steel sector," Krishnamurthi said in the letter.

ISSDA did not immediately respond to a request for a comment.

The association, which counts Jindal Stainless and Steel Authority of India Ltd (SAIL) as its members, had flagged concerns related to unfair trade practice by Chinese developers.

"The influx of subsidised and non-market stainless steel products from China threatens the viability of Indian producers, especially MSMEs (Micro, Small and Medium Enterprises), which are integral to our sector's ecosystem. These enterprises are at risk of being outcompeted by unfairly priced imports, potentially leading to job losses and reduced investments in the sector," Krishnamurthi said in the letter.

India's inbound shipments of steel from China surged by 66.7 percent in the seven months of 2024, reaching 1.5 million tonnes (MT), compared to 0.9 MT during the same period last year, according to data from market analytics firm BigMint.

To ensure a level-playing field, Commerce and Industry Minister Piyush Goyal has proposed a border adjustment tax, and encouraged discussions with the steel industry to protect the interests of domestic manufacturers.

While the country's large steel companies, including Tata Steel and JSW Steel, have voiced concerns regarding the increased imports, the government is yet to arrive at a solution to the reliance on imports. Local steel manufacturers also suggested that the steel being imported may be priced below cost.