The government has begun a probe on imposing safeguard duty, an emergency customs duty to protect the domestic industry, on certain automobile components. The action is based on a complaint by Pune-based Bharat Forge Ltd.
The complaint to the Directorate General of Safeguards (DGS), under the finance ministry, is on a surge in Chinese imports of front axle beams, steering knuckles and crankshafts of medium and heavy vehicles. The investigation was notified on April 2. The DGS had also initiated safeguards duty inquiry on four other products originating from China.
The company has already filed an application for imposition of anti-dumping duty - another import protection mechanism - with the commerce ministry. The process related to anti-dumping is long-drawn, while that for safeguard duty is much easier. The DGS can recommend imposition of the duty, which is then imposed by the Central Board of Excise and Customs.
Bharat Forge, in its application to DGS, said that in the three months ending December 2008, it accounted for the entire production of front axle beam and steering knuckle in the country. It also accounted for 97.2 per cent of the crank shafts produced in India.
The share of Chinese imports in total imports of these products, said Bharat Forge, have gone up in April-December 2008, adversely impacting it.
For front axle beams, the share of Chinese imports stood at 61.8 per cent in the third quarter of 2008-09, against 21.8 per cent in the previous six months of the same year. And the share of Chinese steering knuckles in India’s total import of the product went up to 99 per cent in the three months ended December 2008, from 16 per cent in April-September.
Also, the share of Chinese crankshafts went up to 15.75 per cent in the third quarter, from just 2.3 per cent in the previous six months.
Bharat Forge told DGS that in 2006-07, there were no imports of these products from China.
The company also told the DGS that production of these products has, thus, gone down drastically.
DGS has also since withdrawn investigations on safeguard duty for nylon tyre cord fabric (NTCF). This was after Gurgaon-based SRF and Mumbai-based Century Enka withdrew their complaint on an import surge of Chinese-made NTCF.
Source : Business Standard