The Directorate General of Trade and Remedies (DGTR) will formally initiate on steel industry's request seeking a 25% safeguard duty on imports, and start investigating the complaints in order to prepare its recommendations for the Finance Ministry. A notification to this effect has been issued by the DGTR on December 20.
CNBC-Awaaz reported citing people familiar with the development, that it is possible that a safeguard duty may be imposed on steel imports based on initial findings of the DGTR's inquiry, even before the final report is prepared.
The DGTR probe will determine whether to impose a safeguard duty – a temporary tax – of up to 25% to curb excessive import of steel.
On December 23, shares of major steel producers Tata Steel, JSW Steel, Jindal Steel and others could be in focus at opening bell. On a YTD basis, shares of Tata Steel are flat, as compared to a 10% on the benchmark index Nifty 50. Shares of JSW Steel are higher by only 6% so far this year.
Commerce Secretary Sunil Barthwal had on December 16 said that the ministry is looking into the proposal seeking safeguard duty on certain steel products to curb a rise in the import from some nations, including China.
"There is a request from Steel Ministry on imposing safeguard duty on certain steel products, DGTR (Directorate General of Trade Remedies) is currently looking into this matter and consulting all stakeholders, including MSMEs to see whether this is needed," Barthwal had said.
Steel Minister HD Kumaraswamy had on December 12 said that the Centre is considering to a safeguard duty of 25 percent on steel imports.
India’s import of finished steel products from China reached an all-time high in the first eight months of the fiscal year, as per provisional government data, which has added to the domestic mills' concerns over cheap shipments.
Read More: Why cheap steel imports are a concern for India?
In a conversation with Moneycontrol, Sajjan Jindal, Chairman and Managing Director of JSW Group had raised concerns about the surge of Chinese steel entering India, particularly through the Free Trade Agreement (FTA) route. He highlighted a loophole that enables Chinese steel to reach India indirectly via third-party nations with which India has trade agreements.
Similarly, TV Narendran, Managing Director and CEO of Tata Steel, one of India's largest steel producers, recently stated that India should not allow Chinese steelmakers to "export their problems" to the country. He urged the government to take corrective measures to address the issue.
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