India slaps import duties on stainless steel to help local firms

NEW DELHI (Reuters) - India imposed import duties for five years on some stainless steel imports from China, the European Union and the United States on Friday, as the government tries to protect local companies suffering from what it says is unfair competition.

The government said the anti-dumping duties, on cold-rolled flat stainless steel products, ranged from 4.6 percent to 57.4 percent. Imports from South Korea, South Africa, Taiwan and Thailand will also be taxed.

The moves follows the government's introduction of a 20 percent import tax on some other steel products in September, which failed to contain losses for Indian steel companies struggling to compete due to debts and high raw material costs.

Firms including the Steel Authority of India, JSW Steel and Essar Steel have in recent months complained that surging imports are squeezing profit margins. They are lobbying the government to impose duties on a wider range of products to protect their market share.

"It's a welcome step because today what is hurting the Indian manufacturing sector is dumping," said Seshagiri Rao, Joint Managing Director at JSW Steel.

Other industry experts said the duties were limited in scope and would be easily circumvented because they only applied to products measuring up to a certain width.

"On paper this step looks good but in the long run it is not going to help unless the government removes the restrictions on width," Indian Stainless Steel Development Association President N. C. Mathur told Reuters.

The Directorate General of Safeguards, a branch of the finance ministry that can impose temporary import curbs, said on Tuesday it found prima facie evidence that increases in imports "have caused or are threatening to cause serious injury to the domestic producers", as it investigates local industry complaints.

Indian Trade Minister Nirmala Sitharaman has said New Delhi will lobby for the freedom to raise tariffs temporarily to deal with import surges at upcoming World Trade Organisation talks, which begin in Nairobi next week.

Imports of iron and steel declined slightly to $6.9 billion in the first seven months of the current financial year ending next March from $7.1 billion a year ago, Commerce and Industry Ministry data shows.

(Reporting by Sankalp Phartiyal and Nidhi Verma; Writing by Tommy Wilkes; Editing by David Evans and Greg Mahlich)