The government is aware of the challenging phase of the steel sector and has been adopting measures to address the same, Narendra Singh Tomar, Minister of Steel and Mines, in the Rajya Sabha.
Demand slowdown and global overcapacity have resulted in very low international steel prices. Major steel producing countries, particularly China, are adopting a predatory pricing strategy and exporting at prices, apparently lower than their cost of production, in a bid to capture markets like Europe and India. This has resulted in declining profitability for steel companies globally as well as for the Indian steel industry, said Tomar.
From the government’s end a number of measures have been taken. For instance, to ensure only quality steel is produced or imported, the government notified the Steel & Steel Products (Quality Control) Orders, 2015 in December last year.
To increase availability of coal and iron ore, the government notified the Coal Mines (Special Provisions) Amendment Act, 2015 on March 2015 to streamline coal block allocations and the Mines and Minerals (Development and Regulation) Amendment Act, 2015 during the same period.
Apart from that, the government also hiked the import duty on ingots and billets, alloy steel (flat and long), stainless steel (long) and non-alloy long products from 5% to 7.5% and non-alloy and other alloy flat products from 7.5% to 10%. This was further revised in August, 2015 on flat steel from 10% to 12.5%, long steel from 7.5% to 10% and on semi-finished steel from 7.5% to 10%.
In June, 2015, an anti-dumping duty was levied for five years on imports of certain varieties of hot-rolled flat products of stainless steel from China ($309 per ton), Korea ($180 per ton) and Malaysia ($316 per ton).
A provisional Safeguard Duty of 20% was imposed, in September, 2015 on hot-rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more, for a period of 200 days.
The minimum import price (MIP) condition was introduced in February 2016 on 173 steel products. Imports of items covered under this notification will not be allowed into the country below the notified price.