| Date: |
08-11-2014 |
| Subject: |
Raising import duty on stainless steel Finance Ministry's call: Steel Ministry |
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NEW DELHI: The Steel Ministry has pitched for a duty hike to safeguard domestic stainless steel industry from Chinese imports, but a final call in this regard will be taken by the Finance Ministry.
Acknowledging problems of domestic stainless steel industry on account of rising imports, a senior Steel Ministry official said today that a call on raising import duty to the optimum 10 per cent level would be taken by the Finance Ministry.
Reeling under severe capacity under-utilisation, domestic stainless steel makers, with a cumulative 5 million tonnes per annum capacity, received a breather in the last Budget as the government raised import duty on flat-rolled products from 5 per cent to 7.5 per cent. The industry now wants that raised further to 10 per cent.
"In terms of duty structure (on imports of stainless steel), the higher one can go is 10 per cent in this country because that is the decision taken at the WTO. Beyond that, we will not be able to do. We are already at 7.5 per cent. I don't know what the final view the Finance Ministry will take," said Syedain Abbasi, Jt Secretary, Ministry of Steel.
"If it does, that will give some protection from China. But we must remember that as far as South Korea and Japan are concerned, we have FTAs and there the duty structure will be at zero. So that competitive pressure will continue," he said, addressing the concerns raised by the stainless steel makers at an industry event here.
India is now world's third largest producer of stainless steel behind China and the second largest consumer of the alloy. India's per capita consumption at 2 kg is much lower than the world average of 5 kg, while imports are nearly 30 per cent of the domestic consumption.
With squeezed margins and mounting losses, the largest domestic producer Jindal Stainless has seen its networth dip more than 90 per cent in the last four years pushing it into "potentially sick" unit category. Others are also not in good shape.
Abbasi said the government would take a considerate view taking into account the volume of imports and keeping in mind the trade-off of downstream industries.
The "very survival of the industry is at stake", Jindal Stainless' Chairman & Managing Director Rattan Jindal said. "The domestic industry has invested close to Rs 35,000 crore on capacity expansion and modernisation. This entire loan can become NPA if the government does not do something urgently."
Apart from China, Japan and South Korea export stainless steel to India.
The industry wants government to raise import duty to 10 per cent and bring down duties on imports of the raw material for making stainless steel such as nickel and stainless steel scrap.
Source : economictimes.indiatimes.com
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