DGTR recommends increasing import duty on iron alloy from South Korea for 2 years

The commerce ministry's investigation arm DGTR has recommended increasing customs duty on 'Ferro Molybdenum', used in steel, nickel, cobalt alloys, from South Korea in view of spurt in the imports under a free trade agreement.

The Comprehensive Economic Partnership Agreement (CEPA) between the two countries was implemented in January 2010.

In October last year, India initiated the probe to ascertain if a spurt in the imports from South Korea is hitting the domestic producers.

After concluding the probe, Directorate General of Trade Remedies (DGTR) said the imports have increased in absolute terms and in relation to Indian production and total imports.

The imports of Ferro Molybdenum, DGTR, said increased when the customs duties were eliminated.

Imports of the products from Korea have increased and constitute increased imports within the meaning of the rules and Korea-India CEPA, it said in a notification adding that due to the spurt in the inbound shipments, domestic industry has suffered a decline in profitability.

''It is thus considered appropriate to recommend bilateral safeguard measure...Accordingly, the director general recommends increasing the rate of customs duty on imports,'' it added.

The measure is recommended for two years.

In the first year, according to DGTR, the duty should be increased to the level of Most Favoured Nation (MFN) applied rate of 5 per cent; and in the second year, reduce it to 75 per cent of the MFN rate.

The Indian Ferro Alloy Producers' Association together with Boon Metal & Alloy Corporation, Premier Alloys & Chemicals, and Team Ferro Alloys had filed an application that an increase in imports of the product is causing "serious" injury to the domestic producers.

The application was filed under the bilateral safeguard measures rules of the India-Korea free trade agreement. Under the pact, India has given customs duties concession on this product.

The applicants had claimed that the import of the product has increased in absolute terms and in relation to the production and consumption in India.

There was a sudden, sharp and significant increase in imports between 2018-19 and 2021-22.

The finance ministry will take the final call to increase the duty.

The duty helps in providing a level-playing field to the domestic industry in terms of pricing of the chemical in the domestic market. Pricing is a key component after quality of products in any market.

The bilateral trade between the two countries increased to USD 27.9 billion in 2022-23 as compared to 25.6 billion in 2021-22. The trade balance is highly in favour of Korea.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)