The Directorate General of Trade Remedies, an investigative arm of India's commerce ministry, has recommended the continuation of countervailing duties on welded stainless steel pipes and tubes imported from China and Vietnam. This recommendation aims to protect domestic manufacturers from potentially injurious subsidized imports that could undermine the local industry.
In a recent notification, the DGTR stated that the cessation of the current countervailing duty could likely harm the domestic industry. The directorate has proposed duties of up to 29.88% on these products, although the final decision rests with the finance ministry. The DGTR's investigation, initiated in July 2023 following an application from domestic producers, concluded that removing the anti-subsidy duty could lead to financial losses for Indian manufacturers.
The probe highlighted concerns about excess production capacity in China and declining domestic demand for stainless steel in the country, suggesting that Chinese producers might redirect exports to India if duties were lifted. This potential influx of cheaper imports could severely impact the profitability and market share of domestic producers, making it difficult for them to compete on equal terms.
Originally imposed in September 2019, these duties are designed to counteract the effects of subsidized exports on the importing country's market. Such measures, allowed under global trade norms, aim to provide a level playing field for domestic industries facing competition from subsidized imports. The DGTR's recommendation comes as part of a sunset review of the existing anti-subsidy measures.
The directorate emphasized the necessity of extending these duties to safeguard the interests of the domestic welded stainless steel pipe and tube industry. The recommendation is based on substantial evidence that subsidized imports from China and Vietnam continue to pose a threat to local manufacturers. The DGTR's analysis indicates that without these protective measures, the domestic industry could suffer significant financial damage, including loss of revenue and potential job cuts.
The DGTR's investigation also revealed that Chinese and Vietnamese producers benefit from various government subsidies, which allow them to sell products at lower prices in international markets. This creates an uneven playing field, disadvantaging Indian manufacturers who do not receive similar support. By continuing the countervailing duties, India aims to neutralize the unfair advantage enjoyed by these foreign producers and ensure fair competition in the domestic market.
