Is Indian Govt Considering Hike in Duty on Steel Imports ?

In the recent investor's call , Steel Authority of India Ltd (SAIL) had mentioned that steel mills are pursuing with government to re-impose Minimum Import Price (MIP) on steel imports citing rising imports. Steel mills justified that market dynamics of iron ore and coking coal have changed since anti dumping duty was imposed which is calculated on the basis of MIP.

As per reports, major Indian mills have put up a request to the government to implement higher duties to curb steel imports to India.

SteelMint learned from sources that the commerce ministry is not in favor of increasing MIP levels on steel imports. Government feels that decision can be challenged in the court and may not hold for long.

However steelmakers are hopeful that Indian government may take protective measure to safeguard the interest of steel makers.

How is Anti Dumping Calculated ?

Case 1 - In this case, CIF India price of HRC is USD 550/MT from Japan. However customs duty will remain zero from Japan/Korea amid free trade agreement.

Thus imported prices (CIF + Customs duty) will comes to USD 550/MT.

As this imported price of USD 550/MT is higher than the fixed NIP (Non-injurious price) of USD 489/MT so anti-dumping duty is not applicable.

Case 2 - Taking an assumption that global price fall below the fixed NIP level
When CIF India price of HR coils imports is USD 400/MT from China and customs duty will be levied @12.5%.

So imported price of HRC (CIF + Customs duty) comes at USD 450/MT from China.

Thus imported price of USD 450/MT is lower than the fixed NIP (Non injurious price) of USD 489/MT.

So Anti-dumping duty (AD) = NIP - Imported price (CIF+Customs duty) which comes to USD 489-USD 450 = USD 39/MT.

The balance USD 39/MT importer will have to pay anti-dumping duty which is the difference between NIP and imported price (CIF + Customs duty)