Stainless steel industry urges govt to reconsider CVD revocation on products from China, Indonesia

Stainless steel industry bodies on Thursday requested the government to reconsider its decision of revoking the countervailing duty (CVD) on certain stainless steel products exported from China and Indonesia.

In her Budget Speech on February 1, Finance Minister Nirmala Sitharaman had announced slashing of import duties on a number of steel items, besides revoking the anti-dumping duty and countervailing duty (CVD) on certain steel products.

She said the CVD has temporarily been revoked on imports of certain hot rolled and cold rolled stainless steel flat products, originating in or exported from the People's Republic of China, while the provisional CVD has been revoked on imports flat products of stainless steel, originating in or exported from Indonesia.

In a statement, the Indian Stainless Steel Development Association (ISSDA) along with a few other stainless steel industry bodies has raised concerns that the revocation CVD on the said items will have an adverse impact on the domestic industry.

Besides ISSDA, others are Wazirpur Industrial Estate Welfare Society, Rajasthan Stainless Steel Re-rollers Association, Jagadhri Stainless Steel Re-roller Association and Stainless Steel Re-rollers Association, according to the statement issued by the ISSDA.

''We urged the government to reconsider this step as it will distort the domestic market by flooding it with subsidised stainless steel from China and Indonesia, and will lead several MSME players to the verge of bankruptcy,'' it said.

The ISSDA claimed the two nations have been ''dumping'' subsidised and ''substandard'' stainless steel products in India and other global economies in heavy volumes and in an unregulated manner for the past several years.

According to the ISSDA, China has over 30 per cent surplus capacity for stainless steel production which it exports to countries like India, the exports from Indonesia to India skyrocketed from just 8,601 tonnes in financial year (FY) 2017-18 to 2,80,575 tonne in FY2019-20.

ISSDA President K K Pahuja, in the statement said, ''The government reversed six trade remedies out of which three relate to stainless steel, which is just 3 per cent of overall steel industry in India. Therefore, it has disproportionately impacted stainless steel, including its MSME sector, and considerably dipped the market sentiment.'' It is noteworthy that MSME sector constitutes about 35 per cent of the domestic stainless steel industry, spread across the country, and is a major supplier for utensils and household segments, he said. However, the installed capacity for manufacturing stainless steel in the MSME sector is 15 lakh tonnes, with less than 50 per cent being utilised, he added.

In this background, a potential market brimming with unregulated and cheap imports of Chinese stainless-steel goods is expected to make MSME players go bankrupt or turn them into traders, the ISSDA said.

It further noted that the demand generated by a growth-oriented budget may be captured by cheap dumped imports by Chinese companies, in and out of China. This will further have an adverse impact on prospective investment in the domestic industry, which has been in financial stress for more than a decade and will lead to loss of employment.