India blames massive dumping for invoking MIP, set to tell Japan steel move temporary
India is expected to tell Japan that the minimum import price (MIP) and tariffs on steel is a temporary measure required to protect the domestic industry from massive dumping from certain countries below costs, sources told FE. Last month, Japan approached the World Trade Organization (WTO), seeking dispute consultations with India on “certain measures on imports of iron and steel products”.
India is planning to impose an anti-dumping duty – which is WTO-compatible – on 19 steel products once the MIPs on them expire on February 4, the sources said. Such a move will make it easier for India to justify its trade practices in steel at the WTO.
To protect domestic primary steel producers from dumping from overseas, India has taken a raft of measures since last fiscal, including the imposition of basic customs duty, safeguard duty, anti-dumping duty and a minimum import price. Thanks to huge steel supplies by China, the world’s top producer, countries including the US and Australia as well as the EU have also imposed duties on steel imports. As the second-largest global steel producer, Japan’s own exports have come under pressure due to such stances
Under the WTO rules, a country is free to approach the WTO’s dispute settlement panel if it’s not satisfied with the consultations. At a WTO meeting in April last year, Japan had criticised India’s tariffs and the move to impose minimum prices on imported iron and steel products on grounds that they were a barrier to trade.
According to the data compiled by Japan Iron and Steel Federation, that country exported about 1.25 million tonnes of hot-rolled steel to India in 2015, or about 10% of its total hot-rolled exports of 13 million that year.
For its part, India has already cut down on the number of items covered under the MIP to just 19 from 173 earlier. The MIPs on steel and iron products range from $643 to $752 per tonne.
The 19 products include semi-finished products of iron or non-alloyed steel, flat-rolled products of different widths, bars and rods.
The government had in February last year imposed the MIP — ranging between $341 and $752 per tonne — on 173 steel products initially for six months, which was then extended. The list of items covered, however, was pruned to 66 in August last year, which was again reduced to just 19.
Surging imports at predatory prices from steel surplus countries like China, Japan and Korea have been a major concern area for the
domestic industry since September 2014.