India may save stainless steel against China imports.

India is investigating a flood of Chinese imports of some types of stainless steel and may restrict the trade if it finds its own steelmakers have suffered as a result, according to a document published by the World Trade Organisation (WTO) on Monday.

The probe into imports of the "300 series" of hot-rolled flat products was prompted by a complaint from Indian steel company Jindal Stainless Ltd , after China's share of India's import market for the products leapt from 10 percent to 50% over the past three years.

Under WTO rules, countries can temporarily hike tariffs for specific products if they can prove their own manufacturers risk being damaged by an unexpected increase in imports.

Before introducing these emergency restrictions, known as "safeguard" measures, they must investigate the circumstances and notify the WTO they are doing so.

India announced its notification on July 4 and will decide whether or not to impose the duties within eight months. If it does so, China could challenge the safeguards at the WTO, although the two countries have never fought a fully-fledged trade dispute at the WTO since China joined the global trade body in 2001.

China's steel sector, which produces almost half the world's steel, has frequently been blamed for trade friction, especially by US steelmakers irked by China's cheap exports.

Citing figures from India's steel industry, India's statement said imports from China ballooned to 36,183 tonnes in the 2011-12 financial year from 5,364 tonnes in 2009-10. Over the same period, imports from other countries fell from 45,120 tonnes to 37,071 tonnes.

India's own production of the relevant products grew to 181,512 tonnes from 138,139 tonnes during the period, but actual sales were much lower, totaling 72,831 tonnes in 2011-12, and Indian firms' sales stagnated over the three years.

Source : moneycontrol.com