SETTING UP BARRIERS More steps in offing to check steel imports

The government is readying more measures to check import of steel into the country and protect domestic manufacturers, but at least one of the proposed moves – to fix a minimum import price – may run foul with some of the commitments that India has made under free trade agreements with Japan and South Korea.

Commerce department brass have discussed a plan to put in place a minimum import price to prevent shipments of cheap steel products entering the country from China and other countries which are grappling with severe over-capacity. The proposal has been moved by domestic steel producers, who have been lobbying hard with the government to check imports, arguing that they are facing a brunt of cheap imports into the country. Some prominent steel company representatives also met key government officials to lobby for further protection.

Sources said some of the countries could seek consultations if the government resorted to the provision to put in place a minimum floor price for imports. The government has increased customs duty and imposed safeguards duty but local players are arguing that China is offering more sops at home to deal with surplus production capacity. Initially, the government was not keen to step in, arguing that the measures would impact consumers and users of steel. But, amid intense pressure from local players, it moved ahead with protection.

Apart from minimum import price, the government may also impose additional safeguards duty, which is levied to curb higher imports if they “cause or threaten to cause serious injury” to domestic players, said sources. The Directorate General of Safeguards, which is an independent agency, has found evidence of impact on local manufacturers.

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