Indian steel industry, particularly the long product segment, must thank the anti- dumping and allied duties wing of the government for confirming allegation of dumping from China in wire rods (7213 and 7227, except TMT bar, SS bar and high speed steel under 72131090, 72271000) imports into the country. The injury margin range has been found to be 35-45% in case of Minmetals Yingkou Medium Plate Company, a Chinese steel unit and it is 60-70% in case of all other producers from China. The provisional AD duties (the lesser of dumping and injury margin) would be the difference between landed value of the subject goods (assessable value by the Customs and $499/t CFR, if imported from Minmetals of China or $538/t CFR, if imported from any other steel companies from China.
Currently therefore three steel categories, HR, CR and wire rods are under anti- dumping duty provision from all the major countries from which imports were coming to India. These AD duties imposed under preliminary investigations by the government are fully WTO compatible and is an appropriate substitute for MIP for 66 categories slated to expire on October 4 except that a few categories like billets, slabs, TMT bar, structurals, coated sheets, electrical sheets, tin plates and pipes would be under normal applicable customs duties.
The imposition of AD duties on wire rods from China would also provide relief to a number of small and medium wire rods producers in the country apart from major steel producers SAIL, Tata, RINL and JSW and sets an example of bringing together all segments of the industry in dealing with a common issue of concern.
With an effective trade measure in place to restrict the flow of cheap imports into the country whose cumulative volume would not be less than 5 million tonne per annum, the domestic steel producers would be happy to meet this demand fully. However, this additional market for the domestic producers is to be considered in the backdrop of 7-8 million tonne of additional supply, if not more, from the Greenfield expansion in the country.
It is perceived that steel demand in the country is yet to see its full potential to bloom and currently tends to stand at the threshold of a big upswing. The projects at DFC, Industrial Corridors, National Highways, Metro Rail are running at good speed, affordable housing especially for the mid-income groups are progressing well, while smart cities, construction of minor ports/airports as a part of Bharatmala and Sagarmala conglomerates are yet to gather pace.
The connectivity of North-East region with the rest of the country as embodied in the Industrial Corridor Project is a highly laudable objective. These super mega projects must start in bits and pieces at some states. Land acquisition is a critical issue and is being resolved at each location according to the local rules and procedures. The state governments must align their growth plans with these central schemes and take full advantage of the projects for the benefit of the local population. MM&DR Act has emphasised mine exploration as a major activity; however, actualisation of this target requires industry support and initiatives which are not yet encouraging as uncertain forecast on demand makes them wary of a firm commitment of procurement of raw materials.
The World Competitiveness Report by World Economic Forum has put India’s rank at 39 in the current year compared to 55 in the previous year out of a total of 138 countries. From 59th position in 2012-13 India has considerably pushed up its ranking during the past few years and credit goes to the government for easing procedures, devising transparency to encourage private initiatives, moderating scourge of inflation, establishing a near-effective monetary and fiscal policy, increasing social expenditures and enhancing public participation in urban and rural construction. The report brings to light excellent scope for India to improve its institutions, infrastructure, health and primary education, knowledge and skill development, market efficiency and technological readiness.
Demand growth in the domestic market is a natural corollary of improvement in all these critical indicators. GST from April 2017 would expectedly remove constraints in seamless movement of goods and improve commodity demand.
The author is DG, Institute of Steel Growth and Development. Views expressed are personal.