The European Union imposed five- year tariffs on stainless steel from India, saying EU producers including Acerinox SA (ACX) are victims of subsidies to Indian competitors such as Mukand Ltd. (MUK)

The EU duties as high as 4.3 percent aim to counter alleged trade-distorting Indian aid to exporters of stainless steel bars and rods, which are used in domestic appliances, cars and medical instruments. The levies affect EU imports worth around 40 million euros ($57 million) in 2009.

European producers that also include Ugitech SA and Aceros Inoxidables Olarra SA suffered “injury” as a result of subsidized imports from India, the 27-nation EU said in a decision today in Brussels. The five-year duties match provisional measures introduced in December and will take effect after being published in the EU Official Journal by April 30.

Indian exporters of stainless steel bars and rods increased their combined share of the EU market to 11.8 percent in the 12 months through March 2010 from 10.4 percent in 2007, according to the bloc. It said three aid programs based on India’s Foreign Trade Act and one program stemming from the country’s Banking Regulation Act led to unfair export subsidies.

The duty rates are 3.3 percent against four manufacturers in the Venus group, 3.4 percent against Chandan Steel Ltd., 4 percent against 19 manufacturers including Mukand and Shah Alloys Ltd. (SA), and 4.3 percent against Viraj Profiles Ltd. and any other Indian exporters.

The anti-subsidy -- or “countervailing” -- duties are the outcome of an investigation that the EU opened in April 2010 after a complaint by the European Confederation of Iron and Steel Industries, also known as Eurofer, on behalf of producers representing more than 25 percent of the bloc’s output of stainless steel bars and rods.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Apr 19, 2011 6:26 PM GMT+0700

By Jonathan Stearns

Source: bloomberg.com