Raise customs duty on steel products to beat Chinese imports: Assocham.

Industry body Assocham today called for raising import duty on steel products to a minimum of 10% so that domestic manufacturers can withstand rising inflow of distress and surplus steel from China.

The Budget for 2012-13 proposes to revise import duty on non-alloy flat steel products from 5 to 7.5%. China exports large quantity of Boron-treated hot rolled coils, sheets and plates conforming to alloy steel category, and offers export incentive at the rate of 9% of export value, said The Associated Chambers of Commerce and Industry of India (Assocham).

This attracts only 5% import duty and not 7.5% as increased in the recent Budget proposal, said secretary general D.S. Rawat in communication to the finance ministry. From October 2011 to February 2012, steel imports have increased by 120% over the same period in previous year.

China, the largest steel producer in the world with capacity to produce 828 million tonnes, has an excess capacity of 135 million tons. ``This implies that surplus capacity of China is almost twice that of India’s annual steel production of about 70 million tons,`` said Rawat.

Also, excluding alloy steel category of flat steel from the import duty revision will be a conduit for continuing imports unabatedly and will not address the issue in its holistic manner.

China continues to remain the world`s largest steel exporter registering about 50 million tons or about 20% of the global steel trade (excluding the intra-trade in Europe). In addition, China exports almost 70% of the quantity to its neighbouring countries across east, south and central Asia and Australia.

Source : myiris.com