| Date: |
05-02-2016 |
| Subject: |
Govt plans aluminum safeguard duty to stem imports from China |
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New Delhi: India plans to impose a 10% safeguard duty on aluminum and may raise import tariffs on primary and downstream products to curb cheaper imports from China and other Asian nations.
The six-month safeguard on inbound shipments of the light- weight metal may be put in place within the next two months after discussions with other government departments, Balvinder Kumar, the top-most bureaucrat in India’s mining ministry, said in an interview in New Delhi. Finance minister Arun Jaitley could announce import levies in his budget speech on 29 February.
A slowdown in China’s economy has led to a global aluminum glut and some of the surplus has been flowing into India at lower prices, prompting domestic producers to seek protection. The government, in turn, has asked producers to beat cheaper imports by cutting costs. Some of the nation’s metals producers are already reeling under surging debt after a commodity collapse. Aluminum prices have slumped to a six-year low.
The biggest worry is “aluminum, especially primary aluminum imports from China and other Asian countries,” Kumar said at his office in the nation’s capital on Thursday. The financial year starting 1 April “will be tough as per reports and forecasts. We’re not seeing much scope for improvement,” he said.
Import duties on primary aluminum products may rise to 7.5% from 5%, while other downstream industries may see duties raised to 10% from 7.5%, according to Kumar.
Miner Vedanta Ltd. extended gains after Kumar’s comments, ending the session up 9.9% for the biggest climb since October last year. The benchmark S&P BSE Sensex index rose 0.5%. Hindalco Industries Ltd. closed up 3.1%. National Aluminium Co. fell 0.6%.
China is expected to add about 3 million tons of new, cost- competitive aluminum-production capacity in 2016, which could limit earnings of companies globally, according to Bloomberg Intelligence estimates.
Safeguard measures are emergency actions sparked by threats to local industry from an import surge.
Source : livemint.com
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