Indian Stainless Steel Import Falls in 2017 but Import Duty on its Key Raw Materials Still a Concern

Just like domestic carbon steel sector, Indian stainless steel industry has also been reeling under pressure of cheap imports especially from China, Japan, and South Korea. According to JPC data, India’s stainless steel imports over the past two years 2015 and 2016 were recorded at 0.52 MnT and 0.58 MnT respectively.

Subsequently, in a bid to save the domestic industry from influx of cheap imports, in Dec’15, the Indian government slapped anti-dumping duty of up to 57.39% on import of cold rolled stainless steel products (with width of 600mm to 1,250mm) from China, Korea, the U.S. and EU for five years i.e. till 2020.

Imports Fall in 2017 amid anti-circumvention duty anticipation

Although anti-dumping duty was imposed on cold rolled flat products of width 650mm to 1,200mm, the domestic industry noticed an increasing trend in imports of cold rolled stainless steel products of width above 1,250mm.

In Mar’17 the Indian government once again resumed its investigations into circumvention (evasion) of anti-dumping duties on cold-rolled stainless steel flat products of width 600 mm to 1,250 mm. And this happened after DGAD (Directorate General of Anti-Dumping and Allied Duties) had amassed sufficient evidence of the case.

The anticipation of imposition of anti-circumvention duties on cold rolled flat products led to fall in India’s stainless steel imports in 2017 and the same was recorded at 0.48 MnT, a plunge of 17.2% y-o-y basis.

This apprehension turned in to reality when in Oct’17, Indian government slapped anti-dumping duty on imports of stainless steel products of width above 1,250mm.

Now, it remains to be seen whether the domestic stainless steel manufacturers will have some respite from cheap imports or importers will again find some other way of duty evasion.

Dismay in domestic stainless steel industry

In past two years’ budget, Indian Stainless Steel Development Association (ISSDA) had been seeking removal of customs duties from current level of 2.5% on key raw materials, ferro-nickel and stainless scrap used in manufacturing of stainless steel.

This is because both the raw materials are scarce within the country and the domestic players have to depend on imports only for their availability. This higher input cost is making the domestic players uncompetitive globally.

According to recent reports, ISSDA spokesperson said that continuity of import duty on raw materials would defeat ‘Make in India’ concept. While basic customs duty of 2.5% is levied on import of ferro-nickel and stainless steel scrap, stainless steel import also attracts lower basic custom duty @7.5% against 12.5% for carbon steel. Thus, denying relief on essential raw materials is double whammy for this industry, half of which is in the MSME sector.