The government has asked National Manufacturing Competitiveness Council (NMCC) to examine whether increased imports of raw material for stainless steel products from China are causing market disruption.
The Ministry of Finance, which has already started a probe into it apart from NMCC, has also asked the Standard Board of Safeguards to hold a meeting on November 15.
"The Board requested NMCC to carry out a study on sales invoices and examine their impact on the competitiveness of the user industry of the product under consideration," according to an official document.
The Board has also sought clarifications from DG (Safeguards) for quantum of duty proposed to be imposed, total production of the product under consideration and whether scrap can be used for production of hot-rolled steel.
Jindal Stainless, seeking protection for domestic producers, had recently complained to the Directorate General of Safeguards (DGS) that increased imports of 'Hot Rolled Flat Products of Stainless Steel of 300 series' from China is causing market disruption in India.
DGS, under the Revenue Department, Ministry of Finance, has powers to investigate existence of market disruption to domestic industry due to increased imports and recommend safeguard duty.
The industry has requested for immediate imposition of safeguard duty -- a levy to protect a specific industry from an unexpected build-up of imports -- on the shipments of the raw material from the neighbouring country for four years.
After examining the complaint, the DGS found "prima facie" increased imports of hot rolled flat products of stainless steel have caused and are threatening to cause market disruption to domestic producers.
"... and as such it has been decided to initiate an investigation...," DGS said in a notice.
Imports from China have increased phenomenally from 5,364 MT in 2009-10 to 36,183 MT in 2011-12.
Jindal Stainless' complaint said while domestic production increased due to setting up of a new unit in Odisha (which started functioning from July, 2011), the surge in imports was greater than the increase in production in 2011-12 over 2009-10.
Capacity utilisation of the local industry also declined significantly from 91 per cent in 2009-10 to 58 per cent in 2011-12.
However, inventories witnessed a massive surge from 4,257 MT in 2009-10 to 15,498 MT in 2011-12, "reflecting the plight of the domestic industry," it had said.