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India starts probe into subsidised steel imports from China

India has started an investigation into alleged export subsidisation by China on certain varieties of steel products, a move aimed at guarding the domestic industry.

Jindal Stainless Ltd and Jindal Stainless (Hisar) Ltd have filed an application before the Directorate General of Anti-Dumping and Allied Duties (DGAD) on behalf of the domestic industry alleging "subsidisation" of certain "hot rolled and cold rolled flat products of stainless steel" from China.

They have requested for initiation of an anti-subsidy investigation for levy of countervailing duties on the imports of these goods, DGAD said in a notification. The prima facie evidence provided by the applicant shows that the producers and exporters of these goods in China have benefited from a number of subsidies granted by the government of China and/or other public bodies, it said.

It added that the alleged subsidies consist of direct transfer of funds, government revenue that is otherwise due is foregone or not collected. "The authority (DGAD) hereby initiates an investigation into the alleged subsidisation and consequent material injury and/or threat of material injury to the domestic industry...to determine the existence, degree and effect," it said.

After the probe, it would recommend the amount of countervailing duty, "which, if levied, would be adequate to remove the injury to the domestic industry". The period of investigation is January to December 2015 (12 months). However, it will also look at the data of three fiscal years - 2012-13, 2013-14 and 2014-15.

The DGAD also "finds that there is sufficient prima facie evidence of existence of significant countervailable subsidies on production and export of the goods in China and such subsidised imports are causing material injury to the domestic industry through their volume and price effects".

Recently, the DGAD has started an investigation into alleged dumping of a certain variety of steel products by six countries, including China, Japan and Korea, following a complaint by major producers.

The move assumes significance as the sector is facing challenges due to cheap steel imports. The government has already taken steps such as imposing minimum import price and safeguard duty to guard domestic producers.
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