Directorate General of Trade Remedies (DGTR), a branch of the Ministry of Commerce, has recommended to impose safeguard duty for 3 years on import of some flat steel products. This has been done to protect domestic manufacturers from a sudden increase in steel imports. After this update, on August 18, shares like Tata Steel Limited, JSW Steel Limited, Sale Limited, Jindal Steel & Power showed up to 3 percent.
DGTR has recommended 12% for the first year, 11.5% for the second year and 11% for the third year. The current 12% safgard duty is applicable by the end of September this year. The new announcement is a positive step for steel stocks. At the same time, uncertainty has also gone away about what will happen after the end of the current duty in September.
JSW Steel The most bounce in
Tata Steel shares closed at Rs 157.95 with a gain of nearly 2 percent on BSE. JSW Steel’s stock climbed more than 3 percent to close at Rs 1080.40. Steel Authority of India i.e. SAIL and Jindal Steel & Power also jumped about 2 percent. The price closed at Rs 122.50 and Rs 993.60 respectively. Jindal Stainless Limited’s share increased by 2.5 percent to settle at Rs 748. The Nifty Metal Index has declined by 2% in the last one month.
Why need for safeguard duty lying
This recommendation of DGTR of Safeguard Duty for 3 years on the import of flat steel products has come after investigation on the complaint of the Indian Steel Association. The complaint said that a large amount of steel is being imported from abroad, which is causing damage to Indian companies. Based on the initial results of the investigation, the government imposed a 12 percent temporary safeguard duty for 200 days in April itself.
DGTR said in a notification, “The results have been concluded in the final report that due to unexpected circumstances, there has been a sudden, sharp and large increase in the import of related products (flat steel products) in India recently … and it can cause heavy losses to domestic industry/ manufacturers.”
The domestic steel industry has welcomed the recommendation to impose safeguard duty. It is said that such measures will help India to become self -sufficient in this region. Naveen Jindal, chairman of the Indian Steel Association, said in a statement that making a security trap through the minimum import price is a positive step for the safety and support of the domestic industry and related sectors.
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