Steel Ministry is unlikely to call for the imposition of duty on imports, senior officials told businessline. Better than expected domestic demand is seen as the key reason for the Ministry not pushing ahead with imposition of duties or safeguard measures.
Incidentally, India — the second largest crude steel producer globally, is already a net importer of the alloyl It reversed a three-year trend of being a net-exporter.
Imports vs exports
The country imported 5.6 million tonnes (mt) of steel, as against exports which stood at 4.7 mt for the nine months of April - December of 2023. While imports rose 26 per cent y-o-y, exports dipped 2-odd per cent for the period under review, a Ministry report said.
According to the official, while imports have seen a rise; there is some uptick is exports being witnessed December-onwards. Moreover, domestic demand continues to be good. So, the Ministry “does not feel that there’s an immediate need” to go for higher tax.
“There are no immediate plans to suggest taxes on imported steel even though there is a rise in shipments coming in,” the official said adding that India continues to explore WTO complaint measures.
No Suggestions Made
Typically, the Steel Ministry submits it’s suggestion on the need to impose import duty to the Finance Ministry based on its own assessment of numbers and current market scenarios.
Sometimes investigation are done by the Directorate General of Trade Remedies (DGTR) too, based on industry filing petitions seeking anti-dumping probe. If the DGTR is satisfied it may recommend imposition of anti-dumping duties.
So far, no proposal or suggestion has been made to the Finance Ministry, the Steel Min official said. “No proposal has gone to the Finance Ministry from our side for revision of existing duties or imposition of new ones,” the official said.
Incidentally, India’s steel majors in a recent meeting with Ministry had raised concerns on rising imports, specially from China and Vietnam.
It was suggested that taxes be raised from the prevailing 7.5 per cent on several steel products to curb imports, while other safeguard options like tariff rate quotas, monitoring across ports and reconsideration of lesser duty rules be explored.
However sources said, the Ministry was reportedly not very happy with the data presented by the industry or the logic put forward on the need for imposing duty.
Good domestic demand
“This apart there is good domestic demand which indicates there is higher production and higher requirement too,” the official said.
Steel consumption hit a near five-year high to 99.36 mt, up 14 per cent y-o-y (87.14 mt in 9 Months FY23), government data shows.
India produced 106 mt of crude steel for the April - Dec period, up 14 per cent y-o-y. In the year-ago period it was 93.16 mt. The total finished steel production saw a 13 per cent YoY increase for the April - December period to 101.4 mt.
The private sector production of finished steel stood at 86.4 mt, up by 14 per cent y-o-y; and accounted for 85 per cent of the total production in the country. Remaining 15 mt-odd was the share of PSUs.