Indian Stainless-Steel-Bar Exporters May Face Renewed EU Tariffs

  • European Commission threatens longer anti-sudsidy duties
  • Probe to determine risk of continued Indian state aid

The European Union threatened to renew tariffs on stainless steel from India, saying EU producers may face a persistent risk of unfair competition as a result of subsidies to Indian competitors.

The European Commission began an inquiry into whether to re-impose the duties as high as 4 percent on Indian stainless steel bars and rods, which are used in domestic appliances, cars and medical instruments. The bloc applied the levies for five years in 2011 to help European producers such as Acerinox SA counter alleged trade-distorting Indian aid to exporters such as Mukand Ltd.

The investigation “will determine whether the expiry of the measures would be likely to lead to a continuation or recurrence of subsidization” and “of injury to the union industry,” the commission, the 28-nation EU’s executive arm in Brussels, said on Wednesday in the Official Journal. The anti-subsidy duties were due to expire on April 29 and will now stay in place during the probe, which can last as long as 15 months. EU renewals of such measures are usually for five years.

Indian exporters of stainless steel bars and rods increased their combined share of the EU market to 11.8 percent in the 12 months through March 2010 from 10.4 percent in 2007, the bloc said when introducing the levies. It said three aid programs based on India’s Foreign Trade Act and one program stemming from the country’s Banking Regulation Act led to unfair export subsidies.

The duty rates range from 3.3 percent to 4 percent, depending on the Indian exporter. Originally, the maximum rate was 4.3 percent, which the EU reduced to 4 percent in 2013 when also deciding to exempt one Indian manufacturer -- Viraj Profiles Ltd. -- from the measures.

The inquiry into whether to renew the trade protection stems from a Jan. 28 request by European steel industry association Eurofer on behalf of producers that account for more than a quarter of the EU’s output of the stainless steel bars and rods covered by the measures, according to the commission.

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