INSUBCONTINENT EXCLUSIVE:
flooding excess steel into its market after the United States raised tariffs on Chinese products due to the escalating trade war between the
world's two largest economies, according to three government sources and four industry officials.As a result, the Indian steel industry
has asked the government to put in so-called safeguard duties of as much as 25 per cent to protect it from growing imports
These would be imposed on steel that the government determines has been dumped in India at prices below the cost of production.Since last
year, China and the United States have been locked in a trade conflict as Washington seeks to fix the trade balance, currently tilted in
The two nations have raised or threatened to raise tariffs on each other's goods, moves that could re-draw trade flows and that have
threatened to derail the global economy."China has excess (steel) capacity and there is a concern they could re-route it through other
countries like Vietnam and Cambodia into India," an Indian government source with direct knowledge of the matter said."Steel sector is
vulnerable," the source said, declining to be identified due to the sensitive nature of discussions.India, the world's second-largest
steel producer, turned net importer in the year ended March 31, 2019 after a gap of three years
That is because the country lacks the capability to produce high-quality steel and has lost some of its global clients to cheaper exports
from China, Japan and South Korea."China, Japan, Korea which are major exporters to US, Europe and Canada, because of trade actions, they
are also diverting steel into India," Seshagiri Rao, joint managing director at JSW Steel Ltd, told Reuters.Demanded safeguard duties"It is
very much essential for Government of India to increase the safeguard duty to 25 per cent as soon as possible," said Mr Rao
Currently, there are a range of such duty levels.Last month, steel companies JSW, Steel Authority of India, Tata Steel, Jindal Steel and
Power - controlling over 45 per cent of the country's total steel production - met with government officials to ask for safeguards,
according to a source who attended the meeting.During the meeting, Steel Secretary Binoy Kumar, the top bureaucrat in the Ministry of Steel,
also said that the steel industry was at risk from global excess capacity, the source said.Mr Kumar said India needs to act soon to protect
its fragile steel industry from predatory imports as it would be difficult to revive it if the situation was allowed to deteriorate for
However, he said a decision on safeguard duties has not yet been taken.The steel ministry did not respond to Reuters' emails and phone calls
Neither did SAIL, Tata and JSPL."What we are seeing is that part of displaced exports is already making inroads," said Arnab Kumar Hazra,
assistant secretary general at the Indian Steel Association, which represents major steel producers
There was therefore every reason to argue for safeguard duties given the perceived threat, he said.India had imposed a slew of safeguards in
2015-2017 on several steel products to curb cheaper imports and protect local industry, prompting Japan to refer India's behaviour to the
World Trade Organization (WTO) dispute panel.India's trade deficit with China jumped more than a nine fold over the past decade to $63.05
billion in the year ending March 2018.With the latest US tariffs on Chinese goods, India fears Beijing could also re-route exports of
electronic items, toys, furniture and organic chemicals to India through other Southeast Asian nations.New Delhi and Beijing have been
negotiating over greater market access as China wants to exports milk products and apples to India while New Delhi wants to sell China
bovine meat, sources said.Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on
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Election results will be out on May 23.
