DGTR recommends CVD on certain steel product imports from Indonesia

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The Commerce Ministry has recommended imposition of provisional countervailing duty (CVD) on certain steel products from Indonesia to guard domestic manufacturers from subsidised imports.

The ministry's investigation arm Directorate General of Trade Remedies (DGTR) in its preliminary findings has recommended the duty after concluding in its probe that 'Flat Products of Stainless Steel' have been exported to India from Indonesia at subsidised prices.

The domestic industry has suffered material injury due to subsidisation of the product and therefore it is necessary to recommend imposition of provisional countervailing duty on these imports, the DGTR has said in a notification.

It said that the directorate is of the view that imposition of provisional countervailing duty is required to offset subsidisation and injury, pending completion of the investigation.

"The authority recommends imposition of provisional countervailing duty on the imports...originating in or exported from the subject country (Indonesia)," it said.

The duties recommended are 22.31 per cent, 22.65 per cent and 24.83 per cent on different producers of Indonesia.

The finance ministry will take the final call to impose these duties.

In October last year, the directorate initiated the probe into an alleged subsidised export of certain steel products by Indonesia, following complaints by domestic industry.

The petitioners had alleged that the producers/exporters of certain steel products in Indonesia have benefited from the actionable subsidies provided at various levels by the Indonesian government.

Indian Stainless Steel Development Association (ISSDA), Jindal Stainless, Jindal Stainless (Hisar) and Jindal Stainless Steel had filed an application on behalf of domestic industry before the directorate, alleging subsidisation of these products by Indonesia.

They had requested for initiation of an anti-subsidy investigation for levy of countervailing duties on imports of the goods.

Under the global trade rules of the World Trade Organisation (WTO), a member country is allowed to impose anti-subsidy to countervailing duty if a product is subsidised by the government of its trading partner.

These duties are trade remedies to protect domestic industry. Subsidy on a product makes it competitive in price terms in other markets.

Countries provide this to boost their exports. India and Indonesia are members of the WTO. Indonesia is a major trading partner of India.

The bilateral trade between the countries declined to $19.18 billion in 2019-20 from $21.12 billion in 2018-19. Trade balance is in the favour of Indonesia.