Indian Stainless Steel Development Association (ISSDA) has urged the government to restore the countervailing duty (CVD) on stainless steel products from China and Indonesia in the upcoming Union Budget 2022-23. The decision to suspend the CVD in Union Budget 21-22 has led to a surge in imports from Indonesia and China as was anticipated by ISSDA. The imports are being largely driven by Chinese companies operating from Indonesia, which got a boost after the suspension of CVD in February 2021.
The CVD from both countries was imposed after a detailed investigation by DGTR, where the existence of non-WTO compliant subsidies was established. The apparent reason for duty withdrawal was price control, but it has not served its purpose due to the overall commodity super cycle, which also inflated raw material prices. Rising imports have adversely affected the MSME stainless steel producers and dampened the sentiment for further investment in the stainless steel industry. Import intensity for stainless steel flat product market is five times, at about 25% against 5-6%, for the overall steel industry. CVD was suspended for a period of nine months in the Union Budget 2021-22, and subsequently extended up to 31st January, 2022.
