The domestic steel industry has requested the government to increase the basic customs duty on steel imports and levy an additional 25% safeguard duty on the alloy in the upcoming Union budget to counter dumping of steel from countries such as Japan, South Korea, China and Russia into the Indian market.
The import duty on finished steel products was slashed to 7.5% in the budget for 2021-22. The Indian Steel Association (ISA), a lobby for domestic steelmakers, has written to the finance minister, requesting to restore the duty to 12.5% for flat steel products and increase it to 10% for long products.
About 60% of the steel imports come from countries which India has a free trade agreement with, thus attracting zero basic customs duty. To counter dumping from these countries, steelmakers want a 25% safeguard duty on imports.
Steel imports surged 40% year-on-year to 5 million tonnes in April-December 2022, as per data from the Joint Plant Committee, a government-backed institution. Meanwhile, exports plunged 60% to 6 million tonnes during this period, primarily due to the imposition of a 15% export duty by the government which has since been revoked.
India became a net importer of steel during the December quarter, with imports displacing 8% of the domestic steel demand, said the association.
Steelmakers argue that several countries are dumping their excess steel production into India at prices far lower than in their own domestic markets. With imported steel becoming cheaper, domestic manufacturers claim that they are being forced to cut prices to unsustainably low levels.
"Globally, things are not OK, but India is doing well. So, it is a target, and more and more steel will come to India if the government doesn't take any action," Seshagiri Rao, joint managing director of JSW Steel, told ET in a recent interview.
Source Name:-Economic Times