FinMin probing rising steel raw material imports from China.

NEW DELHI: Acting on a complaint by Jindal Stainless, the Finance Ministry has started a probe into the alleged market disruption due to increased Chinese imports of a raw material for stainless steel products.

Seeking protection for domestic producers, the company recently complained to the Directorate General of Safeguards (DGS) that increased imports of 'Hot Rolled Flat Products of Stainless Steel of 300 series' from China is causing market disruption in India.

DGS, under the Revenue Department, has powers to investigate existence of market disruption to domestic industry due to increased imports and recommend safeguard duty.

The industry has requested for immediate imposition of safeguard duty -- a levy to protect a specific industry from an unexpected build-up of imports -- on the shipments of the raw material from the neighbouring country for four years.

After examining the complaint, the DGS found "prima facie" increased imports of Hot Rolled Flat Products of Stainless Steel of 300 series have caused and are threatening to cause market disruption to the domestic producers.

"... and as such it has been decided to initiate an investigation...," DGS said in a notice.

The imports from China have increased phenomenally from 5,364 MT in 2009-10 to 36,183 MT in 2011-12 - a jump of over seven times.

Jindal Stainless' complaint said while domestic production increased due to setting up of a new unit in Odisha (which started functioning from July, 2011), the surge in imports was greater than the increase in production in 2011-12 over 2009-10.

Capacity utilisation of the local industry also declined significantly from 91 per cent in 2009-10 to 58 per cent in 2011-12.

However, inventories witnessed a massive surge from 4,257 MT in 2009-10 to 15,498 MT in 2011-12, "reflecting the plight of the domestic industry", it had said.

Source : economictimes.indiatimes.com