The government has directed traders to register themselves with its Steel Import Monitoring System (SIMS) for purchases of all iron and steel products, as also certain railways-related items, from overseas from October 16, according to a public notice by the directorate general of foreign trade (DGFT).
The move seems aimed at discouraging iron & steel imports and comes at a time when the Centre has stepped up focus on domestic manufacturing under the Aatmanirbhar Bharat initiative.
Already, the steel ministry has proposed incentives worth Rs 3,346 crore under a production-linked incentive scheme and a phased manufacturing programme to boost domestic production of various grades of steel that are largely imported. These proposals could soon be placed before the Cabinet after vetting by NITI Aayog.
While the registration was earlier mandatory for the imports of about 300 steel and iron products, its scope has now been widened to include about 530 more products.
As such, domestic primary steel producers, including JSW, SAIL and Tata Steel, had enjoyed official protection against cheaper imports since 2016, although most of such safeguard measures have been either withdrawn or become ineffective. Protections that were granted to the steel industry in recent years included anti-dumping duty of 4.58-57.39% on imports cold-rolled stainless steel flat products; fixing up of minimum import price of select steel products set ($341-$752 per tonne); and safeguard duty of 20% on select hot-rolled flat products.
Thanks to the protection against dumping, India’s imports of iron & steel and their products, which stood at $16.3 billion in FY15, dropped to $11.7 billion by FY17 before inching up again, as some of the safeguard measures ceased to exist. The imports picked up to $17.7 billion by FY19 before easing to $15.4 billion last fiscal. In the April-July period of this fiscal, such imports crashed by almost 45%, year on year, mirroring a broader import slump in the wake of the Covid-19 pandemic.
South Korea, Japan and China are the major import destinations for steel and iron. According to the latest public notice by the DGFT, the registration requirement is now applicable to all products under chapter 72 (iron and steel), chapter 73 (articles of iron and steel) and chapter 86 (railway Or tramway locomotives, rolling-stock and parts; railway or tramway track fixtures and fittings; mechanical traffic signalling equipment of all kinds) of the Indian Tariff Code.
These items include certain flat-rolled products; some stranded wire, ropes, cables; certain items of springs and leaves for springs of iron and steel; tubes, pipes and hollow profiles; diesel-electric locomotives; and some parts of railways.
SIMS, under the commerce department, gathers and publishes data of steel mill product imports.
According to the latest order, importers have to submit advance information in an online system and obtain an automatic registration number by paying registration fee of Rs 1 per thousand, subject to minimum of Rs 500 and maximum of Rs 1 lakh on CIF (cost insurance freight) value.
The importer can apply for registration not earlier than 60th day and not later than 16th day before the expected date of arrival of import consignment, it said. The automatic registration number would be valid for 75 days.