Stock Market

Govt to impose anti-dumping duty on 36 products: Steel Secy

As the minimum import price is set to lapse on 66 steel products, sources say that the government is unlikely to extend MIP on steel products will not be extended.

Steel Secretary Aruna Sharma said anti-dumping duty is the long-term arrangement for imports. She added that of the 66 items, 36 items will be pushed under the ambit of anti-dumping duty.

Sharma said that the anti-dumping is WTO-complaint and can be levied for five years. She added that anti-dumping duty per country will be imposed based on evidence.

Further, she said that the government will opt for MIP in TMT and Slabs if international prices fall but present there’s not need to have antidumping duty on TMT due to higher international prices.

Below is the verbatim transcript of Aruna Sharma’s interview to Nigel D’Souza on CNBC-TV18.
Q: We want some clarity on those 66 products. We believe that minimum import price (MIP) is not going to be extended but as you had told us earlier, you were working on some anti-dumping duty. On how many of those 66 products will we see some extension, we will see anti-dumping duty coming in and MIP going off the table?

A: The MIP is a patchwork kind of an arrangement and the long-term arrangement is always anti-dumping. Therefore, on August 4 when we examined the whole thing, out of 173 products, which in February ’16 wherein MIP, we pushed 107 tariff lines into anti-dumping, so now that is a long-term thing of five years and that is based on evidence. So this kind of a trauma of having MIP or not having MIP after every couple of months is done away with.

However, what was balanced was 66 tariff line – that is 173 minus 107, out of that on 27 already orders have been issued for wire rods, so that is 15 tariff lines are gone. So out of 66, 15 are out. Coated sheets, which covers 21 tariff lines – that will be issued in a fortnight, so that will also shift into anti-dumping. So you will be left with only 30 tariff lines and that is of TMT and slabs.

Let me explain. In TMT the import is only 3 percent of the total steel and today’s price of TMT is USD 330 free-on-board (FOB); ranging from USD 330 to USD 340 and China it is 449 to 451. Our domestic price is lower than that, so there is no need to have an anti-dumping here unless and until these people suddenly reduce the price lesser than the domestic price and lesser than their cost of production, so only then there will be a need for having any MIP arrangement to give the protection for the TMT. The same applies to semis. Semis import is only 5 percent and today price is USD 345 and our MIP, in the old one, was USD 341. So in case these prices start falling, so we as a watchdog are observing it, so that immediately we can go with an evidence for the MIP for these 230 lines which is in TMT and slabs that is semis.

Q: Out of these 66 products, you told us that for 36 products, there is going to be some kind of protection that will come in?

A: Issued.

Q: And for the remaining 30 products, you believe that current prices unless they really fall apart then they doesn’t require any kind of protection?

A: Absolutely, because MIP is not something a regular feature. It is like something you step-in when you feel that yes, dumping is happening. We will immediately step-in for TMT and slabs which is the balance 30 tariff lines.

Q: So these 30 products, if I got those numbers right, you gave me one category which was around 3 percent and other category was around 5 percent?

A: Yes, TMT is 3 percent and semi import is 5 percent.

Q: So 8 percent of those imports, you believe that they do not require any kind of…

A: Immediately, no.

Q: Anti-dumping duty is going to be levied to various countries, all the countries together?

A: Depending on evidences. Anti-dumping is completely a transparent method based on evidences. So whichever country we are resorting to anti-dumping, those countries are named. If somebody is trying to short-circuit or bring it through some other countries, those names will also get added the moment the evidence is there.

Q: The last time we spoke, hot rolled coil (HRC) was on few countries and cold rolled coil (CRC) was on the other few countries. So for these remaining 36 products that we are talking about, it is on which countries exactly?

A: It will be on same countries where evidence is there of anti-dumping. The antidumping regime is a systematic transparent regime. There is evidence, anti-dumping steps in, whether it is a name of a country or type of product, both ways.  

Q: Could you give us some clarity then? We will be looking forward now to the anti-dumping rate.

A: For wire rods, they have already issued, coated sheets we will be issuing soon, another fortnight. 

Q: How will it exactly be calculated?

A: It is calculated on the cost of production, evidences in those countries. It is their cost of production plus their transport cost landing at Indian port, so that cost is landed. Anything less than that comes under dumping.

Q: Will they have to pay a customs duty on this?

A: All those rules remain. India is not against imports. Imports will be there, for imports customs duties are there, the rules regulations are there, all that remains. What India is protecting, which is as per the World Trade Organisation (WTO) norms is, no country should resort to dumping it. Dumping means they are selling it in India less than the production cost in their own country.

Q: You would have been in touch with a lot of the ferrous players, what is the difference currently that they are saying between the proposed rate that you are talking about?

A: You see the upward curve in the steel industry, which shows that the benchmark that has been put today is giving them a comfort zone.

Q: So then we could expect that steel prices will balloon up yet again?

A: No, it is not the ballooning of steel price. Steel prices will be competitive.

Q: Have they given you some kind of assurance where they will not go beyond a particular level?

A: For their survival, they will not have to go beyond a particular level. But definitely it will not be less than their production cost and minimum profit margin whatever they calculate.

Q: Could you give us a few details for this fiscal, what has been the import number like and going ahead as well what kind of numbers are you all working with?

A: Import is always going to be of the kind of product which we don’t make like automobile steel. Automobile steel, few of the private sectors have entered into it but it is not able to cater to the complete demand requirements internally and automobile manufacturing is on an upward trend. So definitely that import is going to happen which is a high-end steel till we start manufacturing within the country.

Q: But what are the numbers?

A: You can just check up from that because these numbers keeps on fluctuating but there are statistics that in the month of August, the growth has been 3.4 which has been highest in last 15 years for the steel production, which shows a positive sign.

Q: That is also coming of a low base.

A: But then our gross domestic product (GDP) also starts from the low base. But at least it is a positive trend, it is a correct trend and a correct path.

Q: There was a talk of some kind of bailout package coming in for the steel industry.

A: I don’t think we need any bailout packages. They are competitive enough. Our cost of production within the factory is the minimal in the entire world.

The external factors do make them a little expensive, which we are tackling one-by-one.

Q: These measures that we are taking, they are all WTO compliant.

A: 100 percent, anti-dumping is completely WTO compliant. It is a long-term measure, it is a sustainable measure and based on evidence and transparent way.

Q: How long can these anti-dumping duties will be levied for?

A: For five years.

Q: So for the next five years, our the ferrous industry is safe, these duties are going to stand?

A: Absolutely. It will be based on evidences and it will continue.