India steel ministry may appeal to Modi over anti-dumping rules

India’s steel ministry is
considering appealing to Prime Minister Narendra Modi to back a
proposal to toughen up anti-dumping rules to tackle a flood of
cheap imports threatening its steel industry, a government
source said.

India is among a number of countries and groups such as the
European Union weighing up taking further measures against cheap
exports from countries such as China and South Korea.

Indian purchases of Chinese steel products rose 5 percent in
the 11 months to February, provisional government data showed,
after more than trebling in the fiscal year ending March 2015.
Imports from Japan were up 39 percent, while shipments from
South Korea rose 54 percent between April and February.

Because of the distress in India’s steel industry, the
ministry had written a letter seeking to change anti-dumping
rules, said the source, who declined to be named because he was
not authorised to speak to media.

According to the source, the letter had asked the trade
ministry to alter anti-dumping rules unchanged for two decades
to reflect only the dumping margin. This should effectively
raise the duty and bring India in line with the United States
and Canada, while meeting World Trade Organization (WTO) rules,
the source said.

But the trade ministry turned the proposal down and Trade
Secretary Rita Teaotia said current rules were internationally
accepted and followed, among others, by the European Union.

“They are asking us to amend the rules, but they are looking
at only one country, the United States,” Teaotia told Reuters.

The steel ministry was now considering approaching the
federal planning body, Niti Aayog, or the Prime Minister’s
office to press its case, according to the government source.

India’s steel secretary and Modi’s office were not
immediately available for comment.


Indian companies accuse South Korea, Japan, Russia and
especially China, which produces nearly half of the world’s 1.6
billion tonnes of steel, of unfairly flooding local markets with
cheap products and undercutting them as demand slackens at home.

India last week extended a safeguard import tax on some
steel products until 2018 and imposed a floor price on overseas
purchases in February, but companies such as JSW Steel
, Tata Steel and Kalyani Steels
have been lobbying for more measures.

New Delhi currently takes into account the margin of dumping
and the margin of injury to the industry and restricts
anti-dumping duty to the lower of the two. The dumping margin is
the loss for an exporter selling to another country, while the
injury margin is how much the Indian steel industry is undercut.

The domestic industry also has to prove that dumped imports
are causing or likely to cause injury.

Indian steelmakers say a change in anti-dumping rules would
prevent the steel industry from dying out and stave off the
dependence of sectors such as engineering goods on imports.

The government has issued notices to China, Japan and South
Korea proposing a probe on “dumping” of some steel products,
according to a source at the Directorate General of Anti-Dumping
& Allied Duties.

“What we have been trying to explain to the user industry is
that we are part of the same value chain,” said Seshagiri Rao,
joint managing director at JSW Steel.

“If I am impacted today and you don’t support us – because
it is unfair trade which is happening – the same thing will
happen to you.”

China’s commerce ministry did not respond to requests for
comment on the impact any changes to anti-dumping rules might
have on its exporters.

(Additional reporting by David Stanway in BEIJING; Editing by
Ed Davies)

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