
Steel, PVC, Trump tariffs, and China: How India can tackle the dumping crisis

Summary
- During his election campaign, Donald Trump had threatened tariffs of up to 60% on Chinese exports. If he imposes such high tariffs, Chinese exports to the US could fall by 85%. This output will find its way into other markets, including India. That’s bad news for Indian manufacturers.
Chennai: The most recent dream run for poly vinyl chloride (PVC) and steel manufacturers in India, ironically, coincided with the pandemic. Global supply lines were disrupted, imports dropped, and domestic prices rose sharply. The price of hot rolled steel coil touched a peak of ₹67,000 per tonne while that of suspension PVC—the most consumed variety used for making pipes and wires—was ₹1,85,000 per tonne. PVC players such as Reliance, Chemplast Sanmar and Finolex Industries and steel majors, Tata Steel and JSW Steel, raked in large profits, paid off debts and built strong cash reserves.
But the good times lasted just a couple of years. In 2022, China embraced its ‘zero covid policy’ and shut down large swathes of its country. Soon, ‘predatorily priced’ Chinese imports—where the landed cost of imports is either lower than the cost of production or locally sold price—started flooding the Indian market. Prices tanked.
Suspension PVC imports from China is set to jump six-fold between 2021-22 and 2024-25 (see chart). Not surprisingly, PVC prices have since crashed to ₹80,500 per tonne levels.
The steel industry also faces a similar scenario. Chinese imports have almost quadrupled in the same period (see chart). Add to this, the imports routed through countries such as Vietnam. After a gap of five years, India became a net importer of steel in 2023-24. That gap is set to widen significantly this year.
Domestic steel prices of hot rolled coils (HR coils), a steel product, have fallen to ₹46,000 per tonne currently; Tata Steel’s profits are down and in the last one year, the steel maker’s shares have barely moved, ending 20 January at ₹131.47 a piece.
This sharp fall in profit (pure play PVC companies are in losses) comes despite a strong domestic demand—Indian manufacturers are operating their capacity at more than 80%.
“Continued imports from China at discounted pricing have impacted the profitability of domestic companies. If not addressed through additional duties, the surge in imports can likely delay expansion by domestic players," Sehul Bhatt, director of research at Crisil Market Intelligence & Analytics, warned.
While Steel and PVC are among the most affected sectors on account of low-priced Chinese imports, the situation is the same for many other commodities as well. Overall, imports from China have more than doubled in the last five years (see chart).
Trump effect
The problem is set to worsen as Donald Trump begins his second term as the President of the US. During his election campaign, he has threatened tariffs of up to 60% on Chinese exports. In 2023, Chinese exports into the US aggregated $500 billion. If Trump imposes such tariffs, Chinese exports to the US are expected to fall by 85%. This output will find its way into other markets, including India.
This is already happening to some extent. Since Trump’s first trade war in 2018, Chinese overall trade surplus has doubled to $820 billion levels. But its trade surplus with the US, however, remained at $340 billion, same as in 2018. This indicates that China’s exports have found their way to other markets.
“Without doubt, it will add to the misery and aggravate the situation. India is among the very few large growing markets," said Manish Mishra, chief of corporate affairs, Tata Steel.
How prepared is India to protect its domestic industry from cheap imports?
The myth
Globally, India is seen as one of the most protectionist nations. Its share of anti-dumping measures, globally, is estimated at 15%—far higher than its 2.4% share in global trade. In 2023, India opened 45 anti-dumping investigations, the second highest after the US, which initiated 64 cases. Between 1984 and 2024, it initiated 514 anti-dumping and countervailing duty (CVD) investigations and imposed duties in 315 cases. CVD is imposed on imported goods to offset the subsidies that are given by the exporting country.
“It is a myth that India is protectionist. We may have filed a large number of anti-dumping and CVD cases but in value terms, they are very small," said Rajiv Arora, former additional director general (foreign trade), Directorate General of Trade Remedies (DGTR). The organization is responsible for protecting the interest of the domestic industry by investigating and levying anti-dumping duty, CVD and other safeguard duties.
Also, India is a large growing market with a low-cost mindset. Naturally, it is a fertile dumping ground.
“India is a L1 (in the world of business contracts, L1 stands for the lowest bid in a tender)country. It is price that matters, not quality or source of imports," said N. Krishnamoorthy, deputy managing director, commercial, Chemplast Sanmar, a large PVC producer.
The Indian trade remedial system isn’t very effective either, experts said. “It is tardy and is in desperate need of reform. In its absence, India’s response to predatorily priced imports has been slow, insufficient and ineffective causing a lot of damage to the local industry," said Arora.
Mint reached out to Darpan Jain, director general of DGTR, seeking his views, but did not receive any response.
First line of defence
Quality control order (QCO), a non-tariff measure that ensures imports are subjected to the same quality standards as domestic producers, is the first line of defence that is available to local manufacturers. It is imposed by various ministries as per the Bureau of Indian Standards (BIS) Act.
India has implemented BIS norms for over 700 products domestically. But QCOs are not in place for imports of all products. PVC manufacturers have been seeking a QCO for about two years now. They have good reasons for it. Unlike Indian players, Chinese producers manufacture PVC through the carbide route that uses mercury as a catalyst, which is not environmentally-friendly. The government saw merit in the case and finally issued a QCO in February 2024.
The order had to come into effect from August last year. But its implementation has been extended twice, first to December 2024 and now to June 2025.That’s because BIS has been unable to certify enough foreign manufacturers who are eligible to export to India.
To protect consumer interest—and ensure availability of the product in India—QCOs cannot be implemented unless BIS certifies a certain number of foreign manufacturers.
“When it comes to QCOs, we are still in transition and BIS is not geared enough to implement them quickly," said Arora. “Ideally, it should come into force within six months," added Krishnamoorthy.
Mint made repeated attempts to seek clarifications from BIS but without success.
Second line of defence
The anti-dumping and CVD offer the second line of defence for local players against unfairly priced imports. Safeguard duty protects the domestic industry from a sudden surge in imports. Here, too, India’s record has been found wanting.
For one, the time taken by DGTR to levy these tariff measures is much longer than its peers. “It takes anywhere between 18 to 30 months from the start of dumping to imposition of duties," said A.K. Gupta, founder and director, TPM Consultants, a consultancy into trade remedies. Other countries do it in 9 to 12 months. This is because DGTR demands at least 12 months of data as evidence. “There is no law which states that 12 months data is needed. Even six months is enough," said Gupta.
That apart, the case should ideally be initiated within 15 days of the filing of the application. “In other countries, cases are initiated once there is prima facie evidence and then the investigation begins. But DGTR generally takes a couple of months or more to initiate a case as its officers first start a preliminary investigation, which takes weeks before they even accept the case. This is a typical Indian bureaucratic mindset," said Arora.
Many times, the delay results in DGTR seeking a fresh set of data as happened recently with the steel industry’s application on imports from Vietnam. The application was filed in April 2024 with data on dumping till December 2023. As the case was not initiated before the end of June, DGTR sought a fresh set of data till March 2024. The industry submitted the data, and the process was finally initiated in August and is still ongoing. The industry has, in December, filed an application for imposition of safeguard duty on flat steel imports.
The PVC industry had sought anti-dumping duty on suspension PVC early last year. The case was initiated in March 2024 and an interim duty was recommended at the end of October. An importer went to court against the interim duty and the stay was finally vacated in December, but the interim duty is yet to be notified by the finance ministry.
No immediate relief
Experts say that the PVC sector was lucky to have got an interim duty in the first place. Unlike other countries, DGTR has been quite reluctant to impose interim duty. Of the 353 instances of anti-dumping duties levied since 1984, interim duties were imposed only in 62 cases. “The global practice is to first impose interim duty if there is prima facie evidence and then go for detailed investigation," said Gupta. He blames the non-imposition of interim duty on the workload among DGTR officers. “Levying an interim duty multiplies the workload," he added.
DGTR has about 25 officers while its equivalent organization, in the US, has over 250. Each officer, at any given time, handles 10 to 20 cases. “In the US and EU, it is not more than two or three cases," said Arora.
Another sore point is the ‘lesser duty rule’. Unlike the US, where anti-dumping duty is levied on the full value of dumping, India has passed a unique non-injurious price (NIP) law that calculates the price at which an exporter can sell in India without hurting the domestic industry. This is typically lower than the actual dumping margin. Anti-dumping duty is the lower of the two. This is done to ostensibly protect the interests of consumers.
“But the way the non-injurious price is calculated ensures that the final duty is far lower than what it should be," said Gupta.
Take the case of Soda ash companies. The price of soda ash,used to produce soaps and detergents, is ₹20 per kilogram and 98% of it is produced in Saurashtra. To transport it to south India, it costs ₹12 as freight. For calculating NIP, freight cost is not considered. Imports now feed soda ash demand in south India.The same is the case with hydrogen peroxide, a bleaching agent used to manufacture hair dye, toothpaste and so on. Industries have been impacted in east India as imports from Bangladesh have flooded the region.
In short, India’s trade remedial measures need a strong dose of organizational reform (strengthening of DGTR), policy reform (end lesser duty rule, at least with respect to China), procedural reform (speed up the process and impose interim duty as a norm) and structural reform (better coordination between finance and commerce ministries), Arora further said.
Consumer vs industry
Between 1991 and August 2020, only 0.7% of all DGTR recommendations were rejected by the finance ministry. But between September 2020 and March 2023, the rejection rate shot up to 63%. It is currently at the 19% level. This is because the finance ministry tilted towards protecting consumer’s interest first, especially after the pandemic.

Not everyone agrees. The US, EU and Canada have retained the tariffs that were levied in 2018 to thwart similar large-scale imports from China. India, too, had many tariffs that were allowed to expire. “Are these countries any less consumer-focused than India?" asked Krishnamoorthy.
There is yet another reason.
“The fact that the government was a large capital expenditure spender post-pandemic, and the biggest consumer of products like steel, played a part. They were worried that duties will increase prices," said Tata Steel’s Mishra.
Such a strategy is a double-edged sword. “End users are sacrificing their long-term interests at the altar of short-term profits," said Ramkumar Shankar, managing director, Chemplast Sanmar.
China is sitting on a 100 million tonne surplus steel capacity. Imports from China will continue to flood into India. “If we do not act against dumping, the ability of the domestic industry to expand capacity will be hit. We will become import dependent," warned Mishra.
India plans to take its steel capacity to 300 million tonne (mt) from the current 180mt by 2030-31 and this needs an investment of $120 billion.
Sanjiv Puri, president of the Confederation of Indian Industry and CMD, ITC Ltd, highlighted this issue while speaking to Mint recently. He said that China’s excess capacity was responsible for India Inc’s inability to ramp up private investment. “If they (China) dump stock overseas, we cannot export. And when it comes to dumping in India, it affects us directly," he said.
Going ahead, the government’s ability to balance this conflicting interest—of consumers and industry—could be severely tested.