The EU anti-subsidy directorate imposed definitive countervailing duties on stainless steel bright bars, originating in India on Saturday, responding to charges brought by a club of European steel producers. Barring Panchmahal Steel, Parekh Bright Bars and nine specified companies, all Indian stainless steel bright bar makers will have to pay a 25.5 per cent countervailing duty in the EU, beginning November 13.

Panchmahal Steel and Parekh Bright Bars have been exempt from the levy and nine others will pay countervailing duties ranging from 14.4 per cent to 22.1 per cent. The nine stainless steel exporters in the select list are Bhansali Bright Bars, Chandan Steel, Ferro Alloys Corporation, Grand Foundry, Mukand Limited, Rajratna Metal Industries, Sindia Steels, Venus Wire Industries and Viraj Alloys Limited.

The EU imposed the countervailing duties spurning India's contentionthat the measure was in contravention of the Agreement on subsidies and countervailing measures (ASCM) of the World Trade Organisation (WTO). Meanwhile, Indian hot rolled coils and plates being exported by the Steel Authority of India Limited (SAIL), Tata Steel and Essar Steel, have been put on the ``watch list'' of commodities likely to attract a dumping duty in both the European Union and the United States.

The intended and proposed clamp-down on the Indian metal comes at a time when exports have already begun to decline, because of the worldwide slide in steel prices.

Incidentally, the EU put off a decision on the anti-dumping petition pending against the same steel exporters. It has already imposed provisional anti-dumping duties, followed by provisional anti-subsidy duties on July 17.

The European Union notified provisional anti-subsidy duties on nine stainless steel bright bars exporters from India in July. The same companies had earlier been singled out for provisional anti-dumping duties.

Thedumping duties were reduced to the extent of the provisional anti-subsidy duties by the anti-subsidy directorate of the EU, to avoid double counting. Only two companies had to pay a residual amount as dumping duty, Bhansali Bright Bars of Mumbai and Panchmahal Steel of Baroda.

Bhansali Bright Bars had to pay a dumping duty of 2.2 per cent and an anti-subsidy duty of 14.5 per cent. Panchmahal Steel did not have to pay any provisional duty for having enjoyed subsidies, but got saddled with a provisional dumping duty of 11.4 per cent.

All other stainless steel bright bars exporters have since been paying a provisional anti-subsidy duty of 25 per cent. The EU imposed the duties, ignoring a plea by Indian steel-makers that the findings of their anti-competition petition against European steel producers be taken into account in deciding the anti-subsidy and anti-dumping cases.

Both the anti-subsidy and anti-dumping petitions against Indian steel producers have been brought by EUROFER, an association ofEuropean steel-makers, who account for 80 per cent of the stainless steel trade within the Community. In January this year, the EU levied heavy fines on EUROFER members for colluding on flat steel prices.

According to Indian exporters, EUROFER was attempting a similar price cartel on stainless steel bright bars. The anti-competition petition is expected to come up for hearing next year and will have a bearing on the anti-subsidy and anti-dumping cases as well.

India feels that the exports from the subcontinent were too small to hurt European steel producers, who have 80 per cent of the market tucked under their arm. Stainless steel bright bars from India constitute roughly 10 per cent of the 1.35 lakh tonne of the material consumed in Europe.

The 10,000 tonne of stainless steel bright bars exported from India is too negligible an amount to cause ``material injury'' to EUROFER members, which considerably weakens the anti-dumping case being pursued by them. The WTO norms allow dumping duties when importsat a price cause material injury to the domestic industry of the importing country.

Anti-subsidy petitions against imports from developing countries also do not hold much water if they fail to bring any ``material injury'' to the home industry of a Rich importer. India feels that duty drawbacks allowed to exporters in schemes like the Passbook Scheme and its successor the Duty Entitlement Passbook Scheme (DEPB), were well within the subsidy levels permitted by the WTO.

The EU, however, considers both the DEPB and the Export Promotion Capital Goods Scheme (EPCGS) ``countervailable.''