The Finance Ministry has ruled out further raising the import duty on steel as it would be inflationary.
“Further increase in import duty will affect downstream industry. It will raise the price, which in turn will have impact on inflation,” a senior Finance Ministry official said here.
Last month, duty on various categories of imported steel was hiked between 33.3 and 50 percentage points. However, categories such as stainless steel (Flat) and CRGO (Cold Rolled Grain Oriented Electrical) Steel were exempted.
However, the industry demanded a greater hike and was backed by the Heavy Industry and Public Enterprises Minister Anant Geete.
In an interview to BusinessLine , he said, “Imports are not only hurting Indian steel companies but also workers who are associated with the industry. Today, Indian steel production has slumped to 50 per cent of the installed capacity.”
His fear was that most import is from China, which offers about 15 per cent export subsidy to its manufacturers.
Rise in Chinese imports Steel import rose 69 per cent during the April-January period of 2014-15 and reached 8.12 million tonnes. Of this, China’s share was 2.9 million tonnes, up a whopping 205 per cent from 9,53,350 tonnes in the same period a year ago.
Considering this, even Steel Ministry also pushed for duty hike which was duly obliged by the Finance Ministry.
After the June 17 hike, barring exempted categories, steel products – ingots & billets, alloy steel (flat & long), stainless steel (long) and non alloy long products – with five per cent duty attracts 7.5 per cent.
At the same time, non-alloy flat products and other alloy flat products having 7.5 per cent duty have begun attracting 10 per cent.