EU Hits Indian Screw Makers With Duties to Counter Subsidies

The European Union imposed tariffs as high as 16.5 percent on screws and bolts from India, saying EU producers have been hurt by Indian subsidies.

The duties punish Indian manufacturers of stainless steel fasteners including Lakshmi Precision Screws Ltd. for receiving trade-distorting government aid. The levies range from 3.2 percent to 16.5 percent, depending on the Indian exporter. Lakshmi Precision Screws faces a 13.6 percent duty.

EU producers such as Italy's Bontempi Vibo SpA and France's Ugivis SA suffered "material injury'" as a result of subsidies to Indian competitors, the European Commission, the 27-nation bloc's regulatory arm in Brussels, said on Feb. 11 in the Official Journal. The duties, which took effect yesterday, are for four months and may be prolonged for five years.

Indian exporters of stainless steel fasteners expanded their combined share of the EU market to 18.3 percent in the 12 months through March 2011 from 12.1 percent in 2008, according to the commission.

The trade protection is the preliminary outcome of an inquiry that the commission opened last May after a subsidy complaint by the European Industrial Fasteners Institute on behalf of producers that account for more than 25 percent of EU output of stainless steel fasteners.

EU governments, acting on a proposal from the commission, must decide within four months whether to turn the provisional duties into "definitive" levies lasting for five years. The rates for definitive measures can change.

When it opened the subsidy probe, the commission began a separate investigation into whether Indian exporters of stainless steel fasteners also sell them in the EU below cost, a practice known as dumping. The commission announced no provisional anti-dumping duties in this case on Feb. 11.

From the start of an EU anti-dumping inquiry, the commission has nine months to decide on any provisional measures and the bloc's national governments have 15 months to impose definitive anti-dumping measures.

The cases against India come less than two years after the EU ended earlier threats to impose anti-subsidy and anti-dumping duties on Indian stainless steel fasteners. In July 2010, the EU closed similar inquiries covering imports of the same goods from India and Malaysia without imposing duties.