Companies demand safeguard duty on imports of an aluminium product

Hindalco Industries, Sesa Sterlite and Bharat Aluminium Company have asked government to impose safeguard duty on imports of an aluminium product for four years to protect domestic producers.

Safeguard duty is a WTO-compatible temporary measure that is brought in for a certain time-frame to avert any damage to a country's domestic industry from cheap imports.

Acting on the complaint, the Directorate General of Safeguards (DGS) has initiated an investigation into imports of 'Not Alloyed Ingots Of Unwrought Aluminium'.

The product is a basic form of cast aluminium and is made by the process of solidifying the liquid hot metal by pouring into a mould. The aim is to make the metal easy for handling and transportation.

"The application has been examined and it has been found that prima facie increased imports of (the product) have caused or are threatening to cause serious injury to the domestic producers... It has been decided to initiate an investigation through this notice," DGS said.

The three companies together account for 71% of the total domestic production.

The product is imported from a number of countries, and primarily from Oman, South Africa and United Arab Emirates.

The imports have surged steeply to 154,449 MT in 2012-13 and further to 208,496 MT in 2013-14.

The applicants have claimed that the increased imports of the product have caused and are threatening to cause serious injury to the domestic producers, DGS said.

Production of the domestic industry has slightly declined in 2013-14 (annualised) to 551,086 MT as against the base year 2010-11 when it was 552,864 MT.

The domestic industry suffered loss in sales, market share, caused by increased imports, the applicants said.

DGS said the domestic industry has requested for immediate imposition of safeguard measures for a period of four years in their application.

"The domestic industry has also requested for imposition of provisional safeguard duty in view of steep deterioration in performance of the domestic industry as a result of increased imports," it said.