Paying heed to the stainless steel industry’s demand, steel ministry has proposed an increase in the basic customs duty (BCD) on the product from 7.5% now to at least 10%. The move is aimed at protecting the domestic firms from burgeoning imports from China, Japan and Korea at predatory prices.
“Anti-dumping duty, imposed on certain grades of stainless steel in June last year, has now become redundant as circumventions are happening in galore. We will go by the industry request and suggest some hike in the BCD for stainless steel products,” a senior steel ministry official said.
Like most of the Indian steel sector, the stainless steel industry has also been facing difficult times over the last three-four years as a result of higher imports from China. This has dragged down capacity utilisation of the domestic industry by half to around 3.4 million tonne (mt) per annum.
You May Also Want To Watch:
Brazil levies 14% while Indonesia and Vietnam charge 10% import duty on stainless steel. Prices of the raw material have also fallen by around 18% over the last one year, adversely impacting the realisation of manufacturers.
The government had in June 2015 levied anti-dumping duty for five years on imports of certain varieties of hot-rolled flat products of stainless steel from China ($309 per tonne), Korea ($180 a tonne) and Malaysia ($316 per tonne).
Imports of stainless steel flat products to India have gone up 64% over the last three years to stand at 5.32 lakh tonne in 2015-16. China accounted for more than 50% of the total imports. China was a net importer of stainless steel till 2009, but now it has become the largest exporter of the product due to weak demand domestically. Japan and Korea account for around 15% of the total imports. India has already lowered duties to zero on imports of stainless steel flat products from ASEAN countries and Japan and is in a phased tariff-reduction programme with South Korea.
“Chinese stainless steel manufacturers are supported with high rates of import duty on finished goods with virtually no duties on the raw materials. However, Indian producers are saddled with between 2.5-5% import duty on the raw material including steel scrap. Thus, there is a need to give them us some duty relief,” an industry official said.