PRICE WAR

Mumbai, Nov. 30: The commerce ministry has initiated an anti-dumping investigation into the import of hot-rolled coils from 15 countries, including China, Japan and Korea.

Three Indian companies — Essar Steel, Ispat Industries and JSW Steel — have alleged dumping. Hot-rolled coil is a type of steel.

They furnished many evidences — fall in market share, price undercutting, decline in sale and rise of inventory.

Particularly, a “too significant” difference between domestic and import prices posed a threat to the steel industry.

“There is sufficient prima-facie evidence of the injury being suffered by the domestic industry caused by dumped imports from subject countries,” a notification issued on Friday by the directorate general of anti-dumping and allied duties said.

The government will probe into dumping for imports between April 1, 2007 and September 30, 2008.

According to the directorate, there was a sufficient evidence of the price of the product in the exporting countries being higher than the price for India.

Under the scanner are firms from China, Indonesia, Iran, Japan, Kazakhstan, Malaysia, the Philippines, Romania, Russia, South Africa, Saudi Arabia, Korea, Thailand, Turkey and Ukraine.

Before levying an anti-dumping duty, the directorate looks at the margin of dumping. This is the difference between the normal value of the product and its export price.

There are two ways to ascertain the margin: the first is to compare the average price of many transactions; the second is to ascertain the difference for each transaction.

In India’s case, the steel industry wants a mix of the two criteria. It wants the export price of each transaction to be compared with an average normal price.

The industry says that while the average normal price has remained the same, export prices have been changing across transactions, necessitating the mix.

Steel move

The steel ministry is likely to push for higher customs duty to protect the domestic industry from cheap imports.

“Steel industry has been demanding higher import duty. We will meet the steel manufacturers soon and depending on the situation, push for more levy. We will have a second look at the duty structure,” minister of state for steel Jitin Prasada said.

Advocating greater protection by way of higher taxes, the minister said the government’s move to levy a five per cent customs duty on steel items and restricting their imports would provide cushion.

“The government has to take a call on the economy. There are different dimensions to their decisions. It (customs duty cut) is a welcome move,” he said.

Besides pushing for higher import tax, Prasada said the ministry would also demand a 14 per cent countervailing duty on TMT bars and structurals to make imports competitive.