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Business News/ Industry / Manufacturing/  Steel industry seeks mechanism to restrict cheap imports
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Steel industry seeks mechanism to restrict cheap imports

India became a net importer of finished steel in November

Domestic players have been lobbying for long with the government to introduce measures to check alleged dumping of steel in India from markets such as China and Vietnam.Premium
Domestic players have been lobbying for long with the government to introduce measures to check alleged dumping of steel in India from markets such as China and Vietnam.

New Delhi: The steel industry expects the government to bring in a mechanism in the upcoming interim budget to help curb cheap imports, as rising steel imports are a cause for concern for the sector.

The country became a net importer of finished steel during the first nine months (Apr-Dec) of the current fiscal (specifically in November), with imports at 5.6 million tonnes (mt) and exports at 4.7mt.

Finished steel includes non-alloyed offerings, alloyed ones, and stainless steel.

“With December numbers further widening the gap between exports and imports, it is set to become a huge problem. We have petitioned the government with a request to, at least, bring in a mechanism that ensures that the imports do not continue unabated. We expect something on those lines in the budget," said an executive of a large domestic steel maker.

The executive added that these requests were made during a meeting of steel ministry executives last month.

Domestic players have been lobbying for long with the government to introduce measures to check alleged dumping of steel in India from markets such as China and Vietnam. The steel ministry was said to be exploring the viability of implementing WTO-compliant policy measures if it finds that steel is being dumped here mainly from China and some south-east Asian countries.

Among the proposed measures is a tariff rate quota, where prescribed limits are set for duty-free imports, followed by safeguard duties after the limit is reached.

Another consideration is the elimination of the lesser duty rules in anti-dumping investigations to speed up the process. The lesser duty rule dictates that the adjudicating authority must levy duties lesser than the dumping margin, if lesser duties are adequate to remove the injury to the domestic industry.

However, to determine this requires thorough investigation and access to proprietary data of domestic companies, which delays investigation.

The government, on its part, is not losing sleep over the rise in imports as it feels that the rise in domestic demand has fuelled this.

“Indian steel production has gone up by 12.9% y-o-y, so, more steel is being produced but the demand is also much more...When you look at the numbers, you are producing 128mt of steel and exporting 6–8mt, effectively, using 122mt domestically, and coming in from abroad is 5mt, compared with 122mt. It is a drop in the ocean," Jyotiraditya Scindia, Union minister of steel told Mint earlier.

In addition to this, the steel industry, as part of the Budget recommendation, has urged the government to exempt customs duty on ferronickel imports and continue zero customs duty on pure nickel, exempt customs duty on roasted molybdenum concentrate, ferromolybdenum and ferro-nickel-molybdenum, and a zero customs duty on categories such as steel and stainless-steel scrap and on coking coal & PCI coal.

“India is importing various raw materials like special ferro alloys with low tramp elements, pure metals, other special inputs, refractories which are not being produced in India and basic customs duty for these are in the range of 5.5–8.25% resulting in high cost of production and making secondary steel unviable," Rajamani Krishnamurti, president Indian Stainless Steel Development Association (ISSDA) told Mint in his budget recommendations.

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ABOUT THE AUTHOR
Naman Suri
Naman is a skilled business journalist who excels in breaking down complex financial details. He specializes in the corporate sector, providing thorough coverage of the pharmaceutical industry, the dynamic field of sports business, and the fascinating area of white-collar crime. Naman has a knack for making sense of numbers and presenting them in an understandable way.
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Published: 11 Jan 2024, 10:55 PM IST
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