Demand for a comprehensive package for helping the domestic steel industry has been referred to the Department of Financial Services, according to Union Minister of State for Steel & Mines Vishnu Deo Sai.
However, the government is not preparing any bail-out package for the steel industry, which is going through a severe downturn, he said in a written reply.
"The government is not preparing a bailout for the steel sector. However, representations received from the Indian Chamber of Commerce and Indian Steel Association to consider working out a suitable comprehensive package have been sent to the Department of Financial Services," he added.
Stating that the domestic industry is going through a "severe downturn", the minister said globally demand slowdown and overcapacity have led to historically low international steel prices and surge in cheap imports into India, which resulted in decline in domestic steel prices.
"Lower prices have led to erosion of profit margins and lower sales realisations," Sai said.
To alleviate the problems being faced by the domestic steel firms, the government has taken several measures.
For reducing stress in the steel sector, the Reserve Bank of India has extended the 5/25 scheme in July 2015, whereby longer amortisation period for loans to projects in infrastructure and core industries has been allowed, he added.
The government also increased the peak rate of basic customs duty on flat and non-flat steel to 15% from 10%, Sai said.
It has also imposed several counter measures such as minimum import price, safeguard duty, anti-dumping duty to check cheap imports.