Government of India (GoI) is likely to impose provisional safeguard duty on Hot Rolled Coils.
Market sources reported that Indian government is likely to impose provisional safeguard duty by 20-30% on HRC in order to curb low-priced import from China.
Indian steel industry has been under high credit exposure from banks, which is likely to add to their asset quality woes in case of defaults by steel mills.
Recently, Indian steel manufacturers such as JSW Steel, Essar Steel including others have requested the government to impose safeguard duty on flat steel products. Safeguard duty will be applicable for all nations including countries under FTA. Thus, government is considering the request of steel manufacturers and may impose safeguard duty on Hot Rolled products.
In 2009, similar petition was filed by Essar Steel, but after investigation, no safeguard duty was imposed.
In FY15, India’s steel import surged by whooping 71% as the same was recorded at 9.31 MnT against 5.45 MnT in FY14.
What is provisional safeguard duty?
Under circumstances where delay in investigation would cause damage that would be difficult to repair, provisional safeguard measures may be imposed on the basis of a preliminary determination that there is clear evidence that increased imports have caused or threaten to cause serious injury. Such measures should be in the form of refundable tariff increases and may be maintained for a maximum 200 days. The period of application of any provisional measure must be included in the total application of a safeguard measure. Consultations must be initiated immediately after provisional measures are applied.
What is difference between anti-dumping and safeguard duty?
| Anti-dumping Duty | Countervailing Duty | Safeguard Duty |
| If the goods are imported at dumped prices. |
If the goods were subsidized in the country of export |
If the goods have entered in increased quantities |
| If the dumped imports cause or threaten to cause material injury or material retardation of the establishment of a domestic industry. |
If the subsidized imports cause or threaten to cause material injury or material retardation of the establishment of a domestic industry. |
If the increased imports cause or threaten to cause serious injury to the domestic producers of like or directly competitive products. |
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