India Fears US-China Trade War Will Lead To Steel Dumping
India fears China could soon start flooding excess steel into its market after the United States raised tariffs on Chinese products due to the escalating trade war between the world's two largest economies, according to three government sources and four industry officials.
As a result, the Indian steel industry has asked the government to put in so-called safeguard duties of as much as 25 per cent to protect it from growing imports. These would be imposed on steel that the government determines has been dumped in India at prices below the cost of production.
Since last year, China and the United States have been locked in a trade conflict as Washington seeks to fix the trade balance, currently tilted in favour of Beijing. The two nations have raised or threatened to raise tariffs on each other's goods, moves that could re-draw trade flows and that have threatened to derail the global economy.
India, the world's second-largest steel producer, turned net importer in the year ended March 31, 2019 after a gap of three years. That is because the country lacks the capability to produce high-quality steel and has lost some of its global clients to cheaper exports from China, Japan and South Korea.
Last month, steel companies JSW, Steel Authority of India, Tata Steel, Jindal Steel and Power - controlling over 45 per cent of the country's total steel production - met with government officials to ask for safeguards, according to a source who attended the meeting.
India had imposed a slew of safeguards in 2015-2017 on several steel products to curb cheaper imports and protect local industry, prompting Japan to refer India's behaviour to the World Trade Organization (WTO) dispute panel.
India's trade deficit with China jumped more than a nine fold over the past decade to $63.05 billion in the year ending March 2018.
With the latest US tariffs on Chinese goods, India fears Beijing could also re-route exports of electronic items, toys, furniture and organic chemicals to India through other Southeast Asian nations.