The government is considering imposing anti-dumping duty on steel imports from China to check the galloping rise in supply from the neighbouring country, a move aimed at safeguarding the interests of domestic firms such as SAIL, Tata Steel and JSW.
Domestic primary steelmakers are worried about a potential surge in imports which have turned cheaper in recent months. The price differential between domestic and imported hot rolled coil, for instance, is Rs 3,000-4,000/tonne or around 10% at present. “The domestic steel industry is under stress due to rising imports from China.
Steel producers as well as the government are concerned about this trend. We have written to the finance ministry seeking a rise in import tariff,” mines minister Narendra Singh Tomar said on Wednesday. A decision to impose anti-dumping duty has to be made by the designated directorate, with quasi judicial powers. Such duties are imposed if the directorate finds that the imports inflict injury to domestic producers.
Domestic companies have been, for quite some time now, clamouring for hiking import duty, which ranges between 5 % and 7.5% for different products. Paying heed to their plea, Tomar had written to his finance counterpart Arun Jaitley ahead of the Budget.
Jaitley in the Budget provisioned for raising the tariff rate on steel to 15% from 10% now at a later date if needed. However, no hike has been effected in the last one month. Indian steelmakers have already started urging the government to implement the budgetary provision.
Steel imports to India are most likely to hit a record high of over 9 million tonne in 2014-15 from 5.45 million tonne in the previous fiscal.
Industry sources said steel producers have curtailed production due to competition from rising imports from China, which produces more than what the rest of the world does collectively. In the face of a glut on the back of subdued domestic demand, exports let Chinese steelmakers stay afloat.
Steel is also coming in large quantities into the Indian market from Japan and Korea, taking advantage of the respective bilateral free trade pacts. Along with China, these two countries account for nearly 70% of India’s imports. “Large-scale Chinese imports are taking place particularly in areas of wire and coils.
This is happening because these items are being made available here at Rs 3,000-Rs 4,000/tonne cheaper. They are docking products at their manufacturing costs benefiting from export sops by the government.
The last four-five months have been particularly worse for us. There is an urgent need to raise customs duty by 5%. Otherwise, it will be difficult for Indian firms to even survive,” said an official of a public sector steel firm.
Meanwhile, Tomar said the Centre would send the draft rules for mines’ auction to states for vetting in a week’s time and after getting their inputs, final rules will be framed for allocation of mines containing minerals such as iron ore and bauxite. States would be given sufficient time to respond.
The recently-passed Mines and Minerals (Development and Regulation) Act mandates the Centre to lay out the norms for auctions, for which it has taken consultancy from SBI Capital Markets, the investment banking arm of the country’s largest lender.
Source:financialexpress.com
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