NEW DELHI: India said on Monday it will temporarily withdraw duties on some steel products imposed to stop dumping mainly from China, after a spike in domestic prices hit job-creating small and mid-sized manufacturing companies.
The Indian government announced in its annual budget that it would revoke anti-dumping duties on imports of alloy-steel bars, rods and flat steel products coated or plated with aluminium or zinc until Sept. 30, as part of the 2021/22 federal budget. The changes take effect from Tuesday.
Apart from China, other major exporters include Vietnam and South Korea.
Some of the duties were imposed in June last year when India and China were engaged in their worst military standoff at the remote Himalayan border.
India also on Monday said it would slash custom duties on semi-finished, flat, and long products of non-alloy, alloy, and stainless steel to 7.5% from 10-12.5%.
"Micro, Small and Medium Enterprises (MSMEs) and other user industries have been severely hit by a recent sharp rise in iron and steel prices," Finance Minister Nirmala Sitharaman said in her budget statement delivered to parliament.
Small and mid-sized firms contribute over 30% to India's manufacturing capacity and drive over 45% of the country's merchandise exports.
Steel prices in the country went up by as much as 25% during November-December, which executives said was in line with rising global prices and higher prices of raw materials, primarily iron ore.
"Flat steel products, which are benchmarked globally, are still at discount prices in India compared to the U.S., Europe," Jayant Acharya, director of commercial and marketing operations at JSW Steel Ltd, told Reuters.
Major stainless steel manufacturers opposed the suspension of anti-dumping duties citing risks of cheap Chinese imports flooding local markets.
"The reduction of customs duty on steel products will have no significant impact on the steel industry as most of the steel imported into the country today comes from countries with whom we have a FTA (free-trade agreement) and hence they enjoy zero import duty," said T. V. Narendran, chief executive of Tata Steel Ltd. - Reuters