Cheaper steel imports have begun to hurt domestic steel makers. Hence, Sajjan Jindal, Chairman of JSW Steel Ltd, wants the Government to take a relook at the free trade agreements with Korea and Japan.
Taking advantage of a low duty structure under FTA, steel makers from these two nations have been flooding the Indian market in recent times.
“There is a 300 per cent surge in imports this fiscal from these two countries. The Government should take a relook at FTAs with these two countries with respect to steel products,” Jindal said on the sidelines of sixth Steel Summit organised by Assocham.
Jindal estimates that steel imports into India will touch 8 million tonnes this fiscal, about 10 per cent of the estimated output of 80 mt. During April-July, the imports have grown 36 per cent to 2.5 mt over the corresponding last year.
India has signed a comprehensive economic partnership agreement with Korea in January 2010. A similar agreement with Japan was signed in August last year.
As a result, India is expected to reduce the duties on select products imported from these countries progressively to nil by 2016-17.
At present, the import duty on Korean and Japanese steel products has been reduced to 3.13 per cent from 5 per cent in 2010. Steel imports from other origin attract a 7.5 per cent duty in India.
Jindal said the Government should ensure a level-playing field for the domestic steel makers. “The Japanese steel makers have access to cheap credit at 1 or 2 per cent, while we pay over 12 per cent. There should be some level-playing field,” he said.