New Delhi: Industry body ASSOCHAM today called for raising import duty on steel products from the prevailing five per cent to a minimum of ten per cent so that domestic manufacturers can withstand growing imports from China and CIS countries.
The challenging global environment is bringing fierce competitive pressures on performance and price reduction. “The oversupply in international markets is forcing China and the Commonwealth of Independent States (CIS) to dump their steel products like hot rolled coils, cold rolled coils and other coated products into growing markets like India,” said secretary general D.S. Rawat.
As a result, the Indian steel industry has reduced production and is running at lower capacity utilisation, he said. After China, the United States and Europe, the country ranks as the fourth largest steel producer with annual production capacity of 68 million tonnes. By 2020, the figure is likely to go up to 200 million tonnes.
China and CIS countries posses huge coking coal and iron ore resources which give them cost competitiveness while India depends on imports for its requirements. In the past one year, coking coal prices have increased by more than 100 per cent and put additional burden on steel manufacturers.
Nearly 50 per cent of the steel manufacturing cost is on account of coking coal and 20 per cent on iron ore.
“Most importing nations protect their domestic producers by imposition of a marginally higher import duty while encouraging exports by offering various incentives,” said Mr Rawat. “China, for example, provides export incentives of nine per cent on steel products.”
Raising import duty to a minimum of ten per cent will encourage the growth of domestic steel industry and ensure that India growth story is kept intact, he said in pre-Budget memorandum to the ministries of finance and steel.
In the next two years, steel making capacity is set to expand by 15 to 20 million tonnes for meeting growth in demand of high-end consumer products like cars, refrigerators and washing machines.
Source : orissadiary.com