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Home / Business News / India imposes provisional duty on certain Indonesian steel products to protect domestic industry

India imposes provisional duty on certain Indonesian steel products to protect domestic industry

The countervailing duty will not, however, be applicable on certain products such as blade steel used to manufacture razors and coin blanks used in the production of monetary coins, one of the officials working in the finance ministry said

business Updated: Oct 10, 2020, 16:54 IST
Rajeev Jayaswal
Rajeev Jayaswal
Hindustan Times, New Delhi
On a complaint of Indian steel manufacturers that Indonesia is subsidising its steel exports to India, DGTR had initiated an investigation on this matter in October 2019.
On a complaint of Indian steel manufacturers that Indonesia is subsidising its steel exports to India, DGTR had initiated an investigation on this matter in October 2019. (Representational Photo/Bloomberg File)

The government has imposed provisional countervailing duty (CVD) on certain flat stainless steel products from Indonesia to protect domestic steel manufacturers from subsidised imports.

Based on the findings of the Directorate General of Trade Remedies (DGTR), the finance ministry on Friday issued an order to levy the provisional countervailing duty in the range of 22.31% to 24.83% on certain types of flat stainless products for a period of four months from October 9, two officials said requesting anonymity.

The countervailing duty will not, however, be applicable on certain products such as blade steel used to manufacture razors and coin blanks used in the production of monetary coins, one of the officials working in the finance ministry said.

DGTR, an arm of the commerce ministry, is a single-window agency tasked with providing a level-playing field to domestic industry against unfair trade practices by other countries. It had recommended imposition of CVD in August this year.

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On a complaint of Indian steel manufacturers that Indonesia is subsidising its steel exports to India, DGTR had initiated an investigation on this matter in October 2019. The petitioners alleged that Indonesian steel manufacturers were benefited from a range of subsidy schemes granted by its government that included subsidies on crucial inputs such as coal, electricity, export credit and insurance, hence it was an unfair competition, a second official working in the commerce ministry said.

An unfair trade practice entails export of a product at a price lower than its value and is countered by punitive actions, which are an acceptable measure under multilateral trade agreements. Remedial actions include imposition of anti-dumping duty (against under-priced imports), safeguard measures (imposition of a duty, a quota, or both against an unexpected import surge) and countervailing duty (against export subsidies) to protect domestic units.

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The World Trade Organisation (WTO) allows its member country to impose countervailing duty on a product if that is subsidised by the government of the other trading partner. Both India and Indonesia are WTO members.

Indonesia is the second largest trading partner of India in the ASEAN region. Bilateral trade between India and Indonesia has increased from $4.3 billion in 2005-06 to $21 billion in 2018-19. But, the bilateral trade between the two countries has declined to $19.18 billion in 2019-20. The trade balance is, however, in the favour of Indonesia, officials said.

India imports coal, crude palm oil, minerals, rubber, pulp and paper from the country. It exports refined petroleum products, commercial vehicles, telecommunication equipment, agriculture commodities, bovine meat and plastics to Indonesia.

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