India to contest steel subsidy complaint in EC

NEW DELHI: India will counter an allegation in the European Commission that its steel exports to Europe are subsidised, a senior Commerce Ministry official has said.

The Directorate General of Foreign Trade in the Commerce Ministry has begun the spadework for collecting documents to prove that the complaint before the EC was ill-founded.

"We are collecting information to counter the allegation," the official said.

The European Commission (EC) has started an investigation into allegations that some steel imports from India are subsidised, resulting into damage to its domestic producers.

The allegations, if proved correct, could result in the European Union (EU) slapping anti-subsidy duties on these imports.

EC started the probe on a complaint lodged by the European Federation of Iron and Steel Industries (Eurofer) on February 15. It is alleged that "imports of certain stainless steel bars, originating in India, are being subsidised and are thereby causing material injury to the (European) Union industry."

Eurofer, represents firms which account for 25 per cent of the total production of certain types of stainless steel bars in the European markets.

As per the complaint, producers of the products have benefited from a number of subsidies granted by the Indian Government and from state subsidies.

The subsidies, the complaint alleged, include benefits to industries located in special economic zones, loan guarantees from the Central Government and regional subsidies by Maharashtra and Gujarat.

India's steel exports in 2009-10 fell by 28.7 per cent to 3.16 million tonne as western markets are still to recover from the demand crunch. India's main markets include the US and Europe.