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Govt puts off safeguard duty on steel

New Delhi, May 11: The government today deferred a decision on slapping safeguard duties on steel imports.

Local steel makers are lobbying for the levy as they are worried about cheap imports from Russia and China.

Officials will meet again after two months to check whether there is enough evidence of unfair pricing.

Manufacturers, including Ispat and Essar, have demanded a 25 per cent safeguard duty on hot rolled coils, sheets and similar items.

“We felt that not enough homework had been done and there was a need to consult both the domestic industry and other parties concerned,” commerce secretary G.K. Pillai said after a meeting of the standing board on safeguards.

Sources said user industries, mostly cold rolling mills and consumer durable makers, had lobbied the government against the duty, arguing it was an unfair and a protectionist move by the steel makers.

Their contention was that the crash in raw material prices had allowed global steel makers to sell cheaply.

A safeguard duty is normally imposed to protect local industry from a surge in imports.

The director-general (safeguards) had recommended a provisional duty of 25 per cent on hot rolled coils for 200 days, but the standing board decided to defer a decision.

Officials said the recommendations of the director- general were found to be “insufficient”. The board did not see any urgency in imposing the duty, steel secretary P. K. Rastogi said.

“This was an interim recommendation (of the director general). There should be further examination,” Pillai said.

The government did not feel the local steel industry would be hit by the lack of a safeguard duty in the interim period, he said.

Earlier this year, the government had imposed a similar duty on aluminium products from China and an anti-dumping duty on some stainless steel products.

Steel makers said as much as 7 lakh tonnes of hot-rolled coils were expected to be shipped to India between May and July at a price range of $400-425 a tonne compared with the Indian rates of $500 a tonne.

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