Domestic stainless steel industry eyes higher customs duty

After imposing CVD on Friday, the industry hopes for upward revision of basic customs duty, from 7.5% to 12.5%

Domestic stainless steel industry seeks stronger support from the government as it hopes for an upward revision of basic customs duty for stainless steel, bringing it at par with duty on primary steel products, which currently attracts a 12.5 percent levy.

On Friday, the government imposed 18.9 per cent CVD on Chinese hot and cold rolled stainless steel products, effective for a period of five years.

"We are hoping that the government, would further support this industry in a similar manner as it has done for the carbon steel producers (primary steel makers) where they were protected with series of duties while we (stainless industry) were left high-and-dry," N C Mathur, independent director at Jindal Stainless (Hisar) told Business Standard.

Currently, stainless steel imports draw a basic customs duty of 7.5 percent.

Meanwhile, industry officials counted longterm benefits of CVD imposition for the industry. 

"Imposition of CVD, will help the domestic stainless steel industry increase its capacity utilisations since cheap Chinese imports ate into 20 percent of the total demand," said a stainless steel producer on condition of anonymity. 

"Stainless steel producers, just like primary steel producers also have exposure to banks, and this duty will only place us in a better position to service our debt," he added.

Domestic stainless steel is a three-million-tonne industry as against China, which produces 24 million tonne annually. China's stainless steel production forms almost half of the world's stainless steel output of 45 million tonne.

In the domestic market, Jindal Stainless Group, state-owned Steel Authority of India (SAIL) and Mukand Ltd among others are some of the big producers of stainless steel. Jindal Stainless Group with an annual crude steel capacity of 1.8 million tonne, is the country's largest stainless steel producer.

Since the last couple of years, domestic primary steel producers have received prompt protective measures from safeguard duty to minimum import price to the recent anti-dumping duty in a bid to counter cheap imports flowing into the country. The domestic stainless steel industry, on the other hand, has not been lucky enough to recieve such measures. However, with the imposition of CVD, it seems like the government has now placed its focus on other varities of the alloy.

Stainless steel finds wide application in the making of utensils and is also used in consumer goods items.

• Capacity utilisations can go up by 20 percent post CVD
   
• India stainless steel production 3 million tonne vs China stainless steel production 24 million tonne
   
• Stainless steel producers in better position to service debt
   
• Industry hoping for additional measures
   
• Industry eyeing upward revision for basic customs duty