India imposes provisional CVD on select Indonesian steel products

The government has imposed provisional countervailing duty (CVD) on certain flat stainless steel products from Indonesia to protect domestic steel manufacturers from subsidised imports.Based on the findings of the Directorate General of Trade Remedies (DGTR), the finance ministry on Friday issued an order to levy the provisional countervailing duty in the range of 22.31% to 24.83% on certain types of flat stainless products for a period of four months from October 9. DGTR  had  reportedly recommended imposition of CVD in August this year.

According to sources, on a complaint of Indian steel manufacturers that Indonesia is subsidising its steel exports to India, DGTR had initiated an investigation on this matter last year in October. The petitioners alleged that Indonesian steel manufacturers were benefited from a range of subsidy schemes granted by its government that included subsidies on crucial inputs such as coal, electricity, export credit and insurance, hence it was an unfair competition. An unfair trade practice entails export of a product at a price lower than its value and is countered by punitive actions, which are an acceptable measure under multilateral trade agreements. The World Trade Organisation (WTO) allows its member country to impose countervailing duty on a product if that is subsidised by the government of the other trading partner. Both India and Indonesia are WTO members.

Indonesia is the second largest trading partner of India in the ASEAN region. Bilateral trade between India and Indonesia has increased from $4.3 billion in 2005-06 to $21 billion in 2018-19. But, the bilateral trade between the two countries has declined to $19.18 billion in 2019-20. The trade balance is, however, in the favour of Indonesia,sources said. India imports coal, crude palm oil, minerals, rubber, pulp and paper from the country. It exports refined petroleum products, commercial vehicles, telecommunication equipment, agriculture commodities, bovine meat and plastics to Indonesia.