Stainless steel is increasingly becoming ubiquitous, playing a fundamental role in both our daily lives and livelihoods. From our houses to automobiles, to infrastructure projects and industrial machinery, the alloy lays the foundation. However, for all of these activities to manifest positively, the manufacturing, trade, and effective utilisation of stainless steel is crucial.
Trade, particularly, is of paramount importance – due to its contribution to the global value chain, economic growth, employment generation, and facilitating international cooperation. Of late, the stainless steel trade landscape has witnessed several noteworthy developments worldwide. From the United Kingdom's decision to revoke countervailing duties on stainless steel imports from India to the United States' move to end retaliatory tariffs, there is immense potential for India’s steel and stainless steel industry to strengthen its position and assume a leadership role in the global market.
The United Kingdom's Revocation Of Countervailing Measure On Imports From India
India has established itself as a significant exporter of stainless steel to the United Kingdom. It became the UK's third-largest exporter of stainless steel bars and rods in 2022, helping the country in meeting its demand for these products. However, the UK's tariff structure imposed obligations on importers of Indian stainless steel bars and rods, necessitating the payment of tariffs, aimed at safeguarding the economic interests of the UK. These tariffs, ranging between 0% to 4% posed challenges for its competitiveness in the market.
The United Kingdom, with its exit from the EU, was faced with the decision of specifying and adopting its own policies vis-a-vis trade. Thus, after a review of the trade remedy measures in the UK, the Department of International Trade (DIT) identified that there was a need to put in place its own to protect the interests of the UK. However, the Trade Remedies Authority (TRA), which exists to defend the UK against unfair international trade practices, initiated a review of the trade remedies for stainless steel bars and rods from India to assess the market conditions.
After a thorough investigation, the TRA concluded that neither domestic nor international market conditions, nor historical injury data, pointed to any potential harm that UK producers might face if the measure were to be lifted. Consequently, in February 2023, the TRA recommended the revocation of the countervailing measure imposed on imports of stainless steel bars and rods from India. Further, the UK Government concurred with this recommendation, thereby agreeing to revoke the countervailing measure on imports of stainless steel bars and rods from India.
Placing India In The Changing Trade Landscape
India, in light of increasing stainless steel imports from China, which increased from a mere 5.5 per cent in 2017-20 to 32.9 per cent at present, is distraught with competition from Chinese manufacturers. Imposition of countervailing duties (CVD) on Chinese stainless steel shipments coming to India will be favourable to Indian Stainless Steel industry.
These developments, collectively, are altering the trade landscape of the steel and stainless steel industry, and reshaping the dynamics of global markets. These trends present an opportunity for India to position itself as a leading player in the global markets. By fostering an increased demand for Indian stainless steel, enhancing the competitiveness of Indian stainless steel products, and facilitating a surge in exports, India can effectively stimulate the growth of its economy.
At the global level, these developments position India to capitalise on the growing demand for stainless steel, enabling the country to expand its market share and strengthen its presence in international trade. This, in turn, has the potential to contribute to the overall economic growth of India, as increased exports will lead to higher revenue and employment generation. Moreover, at a domestic level, these are aimed at safeguarding India’s domestic steel and stainless steel sector from unfair competition, while also promoting its growth and contribution to the overall economy.
(Author is Director of Synergy Steels. Views expressed here are personal)