U.S.-E.U. Steel Tariff War Leaves India Worried
The Steel Ministry expressed concern at retaliatory tariffs on steel imports announced by the European Commission after similar curbs by the U.S.
The provisional safeguards are of greater concern to India than the U.S., Aruna Sharma, secretary at the ministry, told BloombergQuint on the sidelines of an event in Delhi today. “Nearly 6 percent of our steel exports are to the European Union, especially Italy. Therefore, it is important for us and we’re watching.”
Sharma said there’ll be a hearing on the safeguards in Sep. 14. “We have put forth our objections because they’ve come up with a blanket order for which discussions are on. Let’s see.”
The measures announced by the European Commission—the arm of the 28-nation bloc responsible for proposing legislation and implementing decisions—came into effect yesterday. They pertain to 23 product categories and will take the form of a tariff rate quota. A press statement by the European Commission said 25 percent tariff will be imposed in each category once imports exceed the average of imports over the last three years. The commission has specified a limit for duty-free imports of specific steel products, beyond which they would attract an average duty of about 25 percent.
“We’ve opposed the three-year principle for averaging imports that the U.S. is reconsidering. We can also put the same case to the E.U,” Sharma said on the remedies at hand. “We want averaging of 2016 and 2017 only as 2015 wasn’t a good year for the steel sector. There is no case in the E.U. against India because we have a niche market there and we’ll be competing in it.”
According to a recent report by Reuters, the main steel exporters to the E.U are:
India is ranked 10th among the major steel exporting countries with total exports at 16.3 million tonnes, according to World Steel Association’s figures for 2018. It’s ranked third among the top crude steel producers, with production of 101.4 MT in 2017. The E.U. was the leading importer of steel in 2017 with imports of 41.2 MT.
“The modalities of the duty structure is universal, but it should be country-specific,” Anand Seth, spokesperson for Engineering Export Promotions Council, told BloombergQuint over phone. “Developing countries such as India will have zero-duty benefit, so they’ll lose the competitive edge. The Indian government should take a holistic view of overall exports from India while discussing with E.U.”
Sharma said there’s no immediate effect of the U.S. tariffs on India. India exports 10 percent of the steel that it produces, she said, adding: “Last year, our capacity was 134 MT, production was 102 MT and exports were 10 MT. In absolute numbers, we’d exported less than 0.9 MT, or less than 1 percent, of our total domestic production to the U.S.”