Government Introduces 12% Safeguard Duty to Shield Steel Sector from Influx of Low-Cost Imports
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Synopsis
On March 19, India’s DGTR proposed a 12% safeguard duty on certain steel products to protect the local industry from cheap imports from China, South Korea, and Vietnam. This action comes in response to rising US tariffs that have triggered a surge in imports.
Key Takeaways
- The DGTR has proposed a 12% safeguard duty on steel products.
- This is aimed at protecting the domestic industry from cheap imports.
- The measure is a response to rising US tariffs.
- Public commentary is open for 30 days.
- Critical circumstances necessitate immediate action.
New Delhi, March 19 (NationPress) The Directorate General of Trade Remedies (DGTR) in India has put forth a recommendation for a 12% safeguard duty on various steel products. This measure aims to shield the nation's domestic steel industry from the influx of cheap imports originating from countries such as China, South Korea, and Vietnam. This surge in imports is attributed to the significant increase in tariffs imposed by the Trump administration in the United States.
The DGTR, which operates as the trade investigative body under the Commerce Ministry, has proposed that these duties be enforced for an initial duration of 200 days, as indicated in a preliminary decision disclosed late on Tuesday.
The DGTR emphasized that any postponement in implementing these provisional safeguard measures could inflict severe and possibly irreparable damage to the domestic industry. This could lead to the closure of existing capacities and hinder future investments aimed at expanding capacity.
It noted that there are indeed critical circumstances necessitating the swift application of safeguard measures.
The recommendation further states, "To mitigate the trade diversion from the US as well as potential diversions from other nations that have established import barriers, any protective action by India must be sufficiently robust to prevent such trade diversion."
The findings are now available for public commentary for a duration of 30 days, after which a final decision will be made. Given the conclusions drawn, the authority deemed it essential to implement a provisional measure to defend the domestic industry from the rising tide of imports.
The surge in imports is significantly influenced by trade diversion resulting from protective measures enforced by the US.
A safeguard duty serves as a temporary tariff intended to protect domestic industries from an influx of imports.
The findings indicate that the trade diversion triggered by US protective measures has been a major contributor to the rise in imports. In response, the European Union and various other nations, including South Africa, Turkey, Vietnam, and Malaysia, have also implemented safeguard duties and barriers against steel imports.
The DGTR has requested feedback on its findings within the next 30 days, following which an oral hearing will occur before the final order is issued.
