Safeguard levy to fight cheap imports

NEW DELHI: The government is examining a plan to impose safeguard, or temporary, Customs duties to help sectors such as steel and chemicals fight a surge of cheap imports, notably from China, officials say.

It has also asked the local industry to help identify products which have seen a big rise in imports in the past few months, as it looks to use all weapons in its arsenal to protect domestic manufacturers, they said.

The government has expedited anti-dumping investigations against cheap imports of a large number of items, mostly from China, and has imposed import restrictions on products used by the automobile and construction industries.

“Imposition of safeguard duties is another option for protecting the domestic industry we can explore. We are putting in place the mechanism which would allow us to take action against import surges,” a government official, who asked not to be named, said.

While anti-dumping duties are imposed if it is established that a country is exporting goods at prices lower than what it is sold for locally, safeguard duties can be imposed if there is a surge in imports leading to market disruption and serious injury to domestic industry.

Since demand in India’s traditional export markets such as the EU, US and Japan is drying up due to the global economic downturn, the government is keen to ensure the domestic industry is protected by catering to the growing domestic market. It is, therefore, exploring a variety of measures to check cheap imports.

The domestic steel industry, hit by falling international prices and imports from China, has received help from the government in the form of fast anti-dumping investigations and import curbs restricting imports of items such as seamless pipes and tubes to only actual users.

“For products where anti-dumping duties cannot be imposed, the Centre can consider imposing safeguard duties,” the official added.