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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