The government has recently been taking various steps with a view to safeguard its large steelmakers from a flood of cheap imports. The government while last month increased duties on certain steel products by up to 2.5 percentage points, it has raised import tax to 10 percent from 7.5 percent on flat steel and to 7.5 percent from 5 percent for long steel products. Earlier, it had imposed anti-dumping duties ranging from $180 to $316 per tonne on some industrial-grade stainless steel.
The Steps taken by government may curb shipments into the country this year. However, these steps could see closing scores of small, local companies that process the metal. Steps will pile up more pressure on small steel processors accounting for almost 60 percent of the India’s overall steel sector, already grappling with faltering demand as the real estate sector slows.
These processors currently buy imported steel at up to 20 percent below India’s pricier, domestic steel, turning it into finished steel products for industrial use. Some associations have raised concern that if imports got reduced, the integrated steel mills would start charging higher prices, irrespective of international price trends ... secondary steel producers would not be able to survive.
In financial year 2015, India’s steel imports had jumped around 70 percent to over 9 million tonnes, with a surge of cheaper purchases from China accounting for about a third of the total. Besides, in the first two months of current financial year, country’s Imports increased by 55 percent to 1.7 MT.