India extends CVD on welded stainless steel pipes from China, Vietnam

The Ministry of Finance, Department of Revenue, has extended the countervailing duty (CVD) on welded stainless steel pipes and tubes imported from China and Vietnam, in a notification dated 10 September 2024.

The authorities made the decision after concluding that removing the CVD would likely lead to a continuation or recurrence of subsidisation and harm to the domestic industry. They recommended continuing the CVD on imports from these countries, with a validity period of five years.

What is CVD?

A CVD is an import tax levied to counteract the impact of foreign subsidies on exported goods. When governments provide financial support to their companies, these companies can sell products at lower prices abroad, undermining local industries in the importing country. To protect domestic businesses from such unfair competition, the importing country imposes a CVD, raising the cost of subsidised imports. This measure helps level the playing field, ensuring that local industries can compete fairly and maintain market stability.

CVD rates

For China, the CVD is 29.88% of the cost, insurance, and freight (CIF) value, meaning the duty is calculated based on the total value of the goods, including shipping and insurance costs.

For Vietnam, the CVD ranges from 0% to 11.96% depending on the specific exporter.

Why is this important?

The continuation of CVD will help protect Indian steel pipe manufacturers from cheap imports, enabling them to compete fairly in the market. Without it, the Indian steel industry could face losses due to subsidised products from China and Vietnam.

HS codes

Harmonised System Codes (HS codes) are used to identify specific products in import-export operations. In this case, these codes would help Customs officials recognise which goods (in the stainless steel pipes and tubes category) would fall under this duty.

The products involved are under HS Codes 7304 11 10, 7304 11 90, 7304 41 00, 7304 51 10, 7304 90 00, 7305 11 29, 7305 90 99, 7306 11 00, 7306 21 00, 7306 29 19, 7306 30 90, 7306 40 00, 7306 50 00, 7306 61 00, 7306 69 00, 7306 90 11, 7306 90 19, and 7306 90 90.

Overall, by continuing with this duty, the Indian government is reaffirming its commitment to fair trade practices and bolstering the growth and stability of its domestic manufacturing sector. This move extends India's CVD protections to shield its stainless steel pipe industry from subsidised competition.