New Delhi: The steel ministry has recommended increasing the import duty on certain steel items up to 15% to protect the domestic industry against dumping of cheap commodities from countries like China and Ukraine.
At present, the import duty on all categories of steel products, used by automobile, consumer durables sectors and construction industry, is 5%.
In a proposal to the ministry of finance, the steel ministry has sought an increase in import tariff on all long products, including TMT bars, to 10%, while that on flat items like hot-rolled and cold-rolled coils, to 15%, an official said.
As the peak customs duty in India is 10 per cent, the proposal of duty enhancement up to 15 per cent is likely to be put up before Parliament for its approval in the ensuing session from February 12, the source added.
Besides, providing protection to producers like SAIL, Tata Steel, Essar Steel and Ispat Industries against cheap dumping from overseas -- where inventories have piled up amid the slackening demand -- the idea behind pushing for higher tariff is to end speculation that steel prices may fall further.
“Steel prices have already bottomed down and once the sentiments are revived with fiscal measures, the demand could be stimulated domestically,” an official said.
Even as the steel ministry has favoured a higher import duty, industry watchers said there was no further need for it as the country’s imports during the April-January period dipped by 16% to five million tonnes.
International prices too have started stabilising at around $550 a tonne, the reason why the case for dumping of the commodity was minimal, they said.
Not buying the idea, an official in the steel ministry said some of the foreign countries have ample raw materials to produce steel at cheaper rates and dump the same in countries like India.
Moreover, the international prices have not stabilised, but are fluctuating between $450-500 a tonne, he said, adding the domestic industry may find it difficult to recover if it continued cutting production and lowering prices amid the threat of cheap arrival of the commodity from abroad.