Duty hike fails to curb steel imports in India
Deepak Kumar | The Dollar Business
Imposition of 20% import duty on certain categories of steel products failed to check a surge in its imports in October, said an expert. Steel imports in India once again rose in October as cheap steel available in China, increase in domestic consumption and rise in trade frictions prompted consumers to look out for cheaper products shipped from other countries. “China has been competitive as they have reduced prices. Attempts are being made by China to reduce steel prices further, so that the duty implemented by India doesn’t impact exports much. Right now we are not expecting a huge decline in steel imports. Its impacts will be more visible in the next two-three months,” C V Raghavan, Director of Finance at Ferro Alloys Corporation Limited (FACOR), told The Dollar Business. China further reduced steel prices to maintain its exports as its outbound shipments fell to a record level in October. The world’s largest steel producer has also prompted many countries to take strict measures to prevent dumping. In September, India had increased import duty for a period of 200 days after cheap imports from China, Japan and Korea had caused a significant injury to the domestic steel industry. Raghavan stressed that the industry will need to wait and watch as the effect can’t be seen so early. Plus the government needn’t increase import duty again as it would expose our domestic industry to a lot of international regulations. “The user industry is also making a lot of proposition to the government over the duty. Rising import duty again wouldn’t help much. The government is trying to protect the domestic industry as well. Imposing an import duty is a temporary measure. And any temporary measure cannot make our industry viable in the long run,” Raghavan said. Imports of steel grew up by 34% to 1.18 million metric tonnes during the last three months as customer took advantage of weak global prices. Steel consumption during August-October grew by 6.6% to 7.06 million tonnes, while domestic production also registered a marginal increase of 1.3%. During April-October this financial year, overall steel demand increased by 4.5% to 46.21 million tonnes, while production declined by 0.4% to 53.32 million tonnes. However, the industry seems to be quite optimistic for a better market scenario in the coming months as the government’s push for “Smart India” plan is expected to create a huge domestic demand. “We are looking at a better future. With the infrastructure boom coming up under the Smart India programme, the domestic demand will be huge, thus giving a lot of opportunities to the domestic steel manufacturers,” said Raghavan.
November 10, 2015 | 01:25pm IST.