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The Finance Ministry's decision to impose countervailing duty (CVD) on imports of certain flat steel products from China will not only help domestic players to recover the losses but also create jobs, industry body ISSDA said today.
The decision to impose the duty was taken by the finance ministry after the Directorate General of Anti-Dumping and Allied Duties (DGAD) found that despite sufficient demand in India and capacities, the domestic industry has lost sales opportunities, which is a direct consequence of subsidised imports from China.
The country's apex stainless steel industry body Indian Stainless Steel Development Association (ISSDA), welcomes the imposition of Countervailing Duty (CVD), its President K K Pahuja said.
Due to the subsidised imports from China, the domestic players were facing huge losses. Some even had to shut down their business, he said.
"This would be a big relief to the domestic players as the subsidised imports from China had distorted the stainless steel market. The situation had reached a pinnacle wherein they were constantly reducing prices in order to maintain the market share and as a result industry was incurring huge financial losses," Pahuja said.
Several MSME segment businesses were also shut due to subsidised imports from China. The imposition of CVD would help in reviving the industry and it would regain the lost ground and create jobs, the President added.
Pahuja added that the CVD investigation was initiated on April 12, 2016 by the DGAD in response to a surge in subsidised imports of stainless steel flat products from China.
Countervailing duty is country specific and is imposed to safeguard domestic industry against unfair trade subsidies provided by the local governments of the exporting nations.
While DGAD recommends the duty, finance ministry imposes it. The actual duty imposed will be the difference between the quantum of countervailing duty proposed (which is 18.95 per cent) and anti-dumping duty payable, if any.
The central government, after considering the final findings of the DGAD, "hereby imposes" the duty on these items, the revenue department said in its notification.
Jindal Stainless Ltd and Jindal Stainless (Hisar) Ltd on behalf of the domestic industry had filed the petition for initiation of anti-subsidy/countervailing duty investigation concerning imports of 'flat rolled products of stainless steel' from China.
The move assumes significance as the sector is facing challenges due to cheap steel imports.