India and China, along with six other countries, have criticised the European Union’s decision to initiate a safeguard investigation on imports of certain steel products, saying it adds to the problem of growing protectionism worldwide.
Safeguard measures — a procedure compliant with the World Trade Organisation (WTO) rules — are put in place to protect a specific industry from an unexpected build-up of imports.
The EU has initiated an investigation to impose a safeguard duty on some of our products because they feel excessive imports from India are threatening their industry,” said an official aware of the development.
A second official said the EU fears that a lot of steel would be diverted towards it after the US action on steel and aluminium exports from many countries. “Presuming this divergence, it wants to tax our steel exports,” he said.
The EU has said its safeguard investigation was in the initial phase and it would be carried out in line with WTO requirements. If it goes ahead, it could have a serious bearing on India’s engineering exports, experts said.
Though the safeguard investigation has been launched against 26 product categories, Indian exporters of crude and stainless steel are likely to get hit the most.
“While exporters of both crude steel and stainless steel will be impacted, the jolt for stainless steel is likely to be more,” said an official at Engineering Export Promotion Council (EEPC) of India, the apex body representing the country’s engineering export sector.
Almost 8-10 companies export stainless steel worth Rs 6,000 crore to EU every year, he said. In the engineering sector, India’s exports of iron and steel and products made from these rose 23.5% on year in 2017-18. Almost 21% of the engineering exports are made to the EU.