The domestic steel industry — reeling under production cuts and rising inventories — got a reprieve today with the Government deciding to impose import restrictions on a key item, hot rolled coils (HRC). The move implies that importers of HRC may now have to secure a licence.
The country imports 7 million tonne steel a year, half of which is HRC. The total steel production in India is about 54.5 million tonne, 35-40 per cent of which is HR coil.
Assocham president Sajjan Jindal described it as a “timely move, which will give the steel industry a much-needed breather.” Vinod Mittal, managing director of Ispat Industries, too said it could not have come at a more appropriate time since inventories had piled up in most companies.
HRC and other articles of iron, including engineering items and automobile transmission shafts, would hitherto come under the ‘restricted’ list, according to a notification from the Directorate General of Foreign Trade this evening.
In a recent meeting, senior commerce ministry officials were impressed upon by various industry representatives to initiate measures to contain cheaper imports. Earlier this week, the government had imposed a five per cent import duty on some steel products in the wake of a steep fall in prices amidst reports of production cuts by several companies.
The ministry is concerned that Indian markets could become vulnerable to dumping especially since neighbouring China has slashed export restrictions on steel. Prime Minister Manmohan Singh has also said that the government would use all policy measures to protect the domestic industry, while asking it to retain the employees.
Source : Indian Express.com