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Union budget opens flood gates for Chinese Stainless-steel companies

Temporary revocation of Anti-Dumping & Countervailing Duties from China and Indonesia to crush domestic manufacturing and defeat ‘Make in India.’

01 February, 2020, New Delhi: In an unprecedented move, an announcement in the Union Budget has facilitated opening of the flood gates for imports of stainless steel flat products from Chinese companies located in mainland China and Indonesia. By way of announcing a temporary suspension of Countervailing Duty, the government has enabled irrational imports of stainless-steel finished products from China and Indonesia, wherein the injury to the domestic industry had been proven after detailed investigations by the Directorate General of Trade Remedies (DGTR). DGTR had imposed Countervailing and Anti-Dumping duties on such non-WTO compliant imports into India. Suspension of these duties will undermine domestic manufacturing and open the floodgates for cheap imports of stainless-steel flat products in total stainless consumption, thus damaging the ‘Make in India’ movement and severely impacting employment generation in the country.

Mr K K Pahuja, President, ISSDA said, “The temporary suspension of the Countervailing Duties on stainless steel flat product imports has been a big unintentional gift to Chinese companies that will severely hit the domestic stainless-steel industry, which has been in financial stress for more than a decade. For Chinese companies in Indonesia, this translates into heavy flooding of Indian markets with duty-free imports under the ASEAN FTA. Imports from Indonesia skyrocketed from just 8,601 MT in FY2017-18 to 76,102 MT in FY2018-19 and 280,575 MT in FY2019-20. This will not only hamper Indian production but will turn many MSME manufacturers into traders. The Government’s geopolitical stand on banning Chinese apps on one hand starkly contrasts the easing of bulk trade on the other hand to favor Chinese producers, especially after unfair trade practices have already been proven. Moreover, this stance on the suspension of duties, albeit temporary, will remain at loggerheads with the Atmanirbhar Bharat mission and the $5 trillion economy dream. This has more than offset the positives of the Union Budget in terms of duty exemption on scrap and higher infrastructure spending.”

It is noteworthy that stainless steel constitutes only 3% of the total steel requirement of our country, but comprises over 35% MSME suppliers, who will be adversely affected by this decision. Dumping by Chinese companies and China-funded companies in Indonesia has been rampant not only in India, but also in other global economies, all of which have countered this dumping by enforcing additional duties.

Established in 1989 by leading stainless steel producers, Indian Stainless Steel Development Association (ISSDA) was formed with the explicit objective of diversifying the applications of stainless steel and increasing usage volumes in the country. At the time of inception of ISSDA, the main visible application in daily life was essentially household kitchenware, which has now diversified significantly. Through the focused efforts of ISSDA and its member companies, the widespread and visible use of stainless steel in different walks of life is all too evident, especially in the Architecture, Building & Construction (ABC) and the Automotive, Railway and Transportation (ART) sectors. The technical strength of ISSDA is derived from its close association with the Nickel Institute, the International Stainless Steel Forum (ISSF), and close collaboration with more than 20 stainless steel development associations around the world. As a result of these efforts, India has now emerged as the second largest stainless-steel producer and consumer in the world.

ISSDA 30 yr Logo.jpg

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