Stainless Steel: Chinese and Indonesian Imports Overwhelm Indian Stainless Steel, Learn How

New Delhi (South Asian Wire):

Last year stainless steel imports ( Stainless Steel is went to Import) recorded a whopping 177 per cent. Most of it (Stainless Steel) has been imported from China and Indonesia. This has put the domestic stainless steel industry in trouble. Anil Kumar Choudhary , former chairman of SAIL and chairman of Metals and Minerals Committee of PHDCCI , says that imported stainless steel has cast a shadow on the domestic industry. The government should take immediate measures to avoid its ill effects. Come, let us know what they have to say about this.

India is the second largest producer of
stainless steel India is the second largest producer and consumer of stainless steel in the world. It has a total capacity to manufacture 5 million tonnes of stainless steel every year. This is enough to meet the needs of the country. Of stainless steel, 12 per cent is used in construction and structure, 13 per cent in vehicles, railways and transportation, 30 per cent in capital goods and 44 per cent in durables and household utensils. Apart from this, 1% stainless steel is also used in other works. Stainless steel is environmentally friendly. This is because it has a low emission foot print in it. It is reusable and requires less maintenance. It runs longer and gives more profit.

Several steps taken by the government to promote the domestic industry The Government
of India under the leadership of the Ministry of Steel has taken several steps to assist the Indian stainless steel industry. The industry had to face a lot of trouble when the imports crossed the five lakh tonne mark. Imports accounted for about 20 per cent of the annual consumption in 2015-16. To tide over the difficulties, the government has (in June 2015) imposed anti-dumping duty, issued Stainless Steel Quality Order in 2016 (with effect from February 2017) and countervailing duty which came into force against imports from three in September 2017. All this helped reduce sugar imports significantly.

The crisis started with last year’s budget
The success story of the Indian stainless steel industry has come to a halt after the budget announcement of February 1, 2021. In the budget, CVD on import of certain hot rolled and cold rolled stainless steel flat products has been temporarily abolished and is till 30 September 2021 for exports from China or commencement of exports. It also announced the abolition of interim CVD on imports of stainless steel flat products that come from or are exported from Indonesia. The budget decision led to a flood of imports in the country. For the first four months of the current financial year 2021-22 (April to July of FY22), there has been a strong growth of 177 per cent in stainless steel imports as compared to the average of the previous year (FY21). This is an increase of 159 per cent over the 2016-17 average and is the full base year prior to the imposition of CVD on China.

Further troubles in July this year The
situation was further aggravated in July 2021, when China’s share in overall imports increased to 66 per cent and Indonesia to 15 per cent. In this way, imports from the two countries increased to 81 per cent. This is a huge increase in the second half of FY18 (after CVD) when China’s share was only 27 per cent and Indonesia’s only 3 per cent. The sector’s capacity utilization has dropped to 60 per cent in recent months, as Indonesia-run industries with Chinese and Chinese money are dumping their goods here. Due to this, most of the unutilized capacity is from the scattered MSME sector which accounts for 28 per cent or 1.4 million tonnes of stainless steel capacity.

Businessmen are getting ruined
Such a drastic reduction in capacity utilization has ruined many businesses and has led to significant unemployment in the industry. Due to this many manufacturers are forced to work as traders. Various associations of re-rollers have also reported that many of their members who wanted to set up and invest in new plants have postponed their investments due to unfavorable conditions. The All India Stainless Steel Cold Rollers Association, a leading organization for manufacturing and supplying stainless steel in India, has clearly depicted the difficult situation in a letter to the Finance Minister. The letter said, “As we are recovering from the effects of COVID, if CVD is not implemented expeditiously, our MSME members will not be able to handle their business and will be forced to close it and become traders. We demand that the abolition of China’s CVD should be withdrawn from 1 October 2021 and CVD should also be applied to Indonesia.

What can be done to save this industry?
First, the government should withdraw the 7 September 2017 suspension of CVD on China. Second, accept the new final CVD results on Indonesia as recommended by the DGTR on 15 January 2021 and impose anti-subsidy duty on imports from Indonesia. As the stainless steel industry is the top target for imports, it needs substantial support to create a level playing field in the country. In cases where it is established that the subsidized stainless steel is being dumped, measures need to be taken to correct the trade and the same should be applied to the continuing/completed cases. The much needed government assistance will increase the profitability of the indigenous producers. As a result, more investments will be made in the country, which will give momentum to the economy. This will create employment opportunities and the government revenue will also increase.

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