Steel industry's clamour for raising duty to rein in the burgeoning imports has found resonance in the political circles
Steel industry’s clamour for raising duty to rein in the burgeoning imports has found resonance in the political circles. Former commerce minister Anand Sharma of Congress and CPI (M)’s Tapan Sen have recently written to the Centre, calling for an early intervention in the matter.
Sharma, a Rajya Sabha member, wrote, “At a time when the demand is falling in other major markets, India is the only market where steel demand is growing. However, the industry is in distress due to surge in imports from countries, which have huge production capacity and surplus steel available for exports.”
Based on the representation from the Indian Steel Association (ISA), he said the alleged predatory pricing poses a challenge to major Indian steel producers, who have registered heavy losses for the first time in their history.
The affected producers belong to both the private sector and the PSUs including Rashtriya Ispat Nigam, Sharma said urging the government to pay “urgent attention” to the issue.
India’s steel imports have surged by 29% during the April-December period of the current fiscal to stand at 8.38 MT, primarily at predatory prices. China, Japan and Korea accounted for nearly 70% of the total 9.31 MT steel imports into India in last fiscal, which saw a 71% growth over 2013-14. The steel ministry has already taken a series of measures to rein in rising imports that includes raising of the import duty twice in June and in August by 2.5% each, imposing safeguard duty on select products and even levying anti-dumping duty on certain grade of stainless steel imports between $180 and $316 per tonne.
Sen, a Rajya Sabha member and also a member of the consultative committee for the ministry of steel, sought “urgent intervention” of the commerce and industry minister Nirmala Sitharaman to douse the “severe crisis being faced by country’s steel industry mainly due to dumping of steel in the country”.
“All these countries are having surplus steel capacity at their disposal and owing to recessionary situation prevailing worldwide, the surplus situation in their countries aggravated, threatening their capacity utilisation and it is but natural for them to find India as a dumping ground,” Sen wrote.
“Please appreciate, the problem is not the competitive deficiency of Indian steel producers vis-a-vis the imported materials. The price at which different items of steel are flowing to Indian market is below cost price and none in the world can produce steel so cheap. And, if the changes in the import prices are studied month-to-month basis during the last one year or so, this basic fact will come clear,” he added.
Country’s steel industry needs a strong anti-dumping measures, if they are to be saved, Sen said, adding that since it might take sometime to complete the formalities for the anti-dumping measures, if no action is not taken by the government in the meantime, it may prove “ highly costlier for the domestic steel industry, the PSUs in particular.”
“Some immediate interim measures to contain the flow of import of steel in the country is required to arrest further aggravation of the situation almost to a point of no return,” he said.