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India’s steel ministry, in a bid to control imports, especially from China, may consider setting up a quality testing lab at the JNPT port, off Mumbai.
Other safeguard measures mooted include reconsideration of the ‘lesser duty rule’, and imposition of tariff quotas on the lines of the European Union.
The ministry has also reached out to industry bodies and user industries seeking justification for such safeguard measures.
At a recent meeting between ministry officials and industry top brass, including representatives from industry bodies, it was pointed out that the imports, which largely arrive at JNPT Mumbai, have surged by over 40 per cent during iApril to October 2023, compared to the corresponding period a year ago.
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“For implementation of mandatory quality control order for steel and steel product also, the lab testing facility are required to be developed so that random samples get tested. Arresting misclassification and misdeclaration by exporters/importers should also be a priority. Hence, a port-based scrutiny would be a quick way to check imports,” it was reportedly suggested, as per the minutes of the meeting reviewed by businessline.
Net importer
India became a net importer of steel during the April-November period (eight months of the fiscal) due to a continued fall in export orders and stiff competition from imports. Finished steel imports stood at 4.3 million tonnes (mt), exceeding exports (4 mt) for the eight-month period. This marks a drastic change for India, the second largest producer of crude steel globally, from its position as a net exporter.
Government data shows that steel imports from China increased by 47 per cent, while an internal review by the ministry raised concerns about imports from Vietnam, Korea and Japan, which are up by 13 per cent.
Non-prime material
Industry bodies pointed out at the meeting that import of non-prime material was another matter of concern.
Non-prime steel imports into India during April-October included cold-rolled offering, which constituted 13 per cent of imports, while coated steel was 10 per cent, indicating a violation of quality control orders (QCOs). These non-prime steels are imported at abnormally low prices.
“Re-routing of imports was taking place. ‘Rules of origin’ in all trade facilitation agreements must be ‘melt and pour’ for steel, considering the advantageous position India has the in steel sector,” it was mentioned.
Justification of suggested mechanisms
During the meeting it was suggested that tariff rate quotas (TRQ) should be considered, on the lines of a similar response by the EU and the US.
It was also mentioned that while levying punitive duties, such as countervailing or anti-dumping duties, India follows the ‘lesser duty rule’, which needed to be reconsidered.
Incidentally the steel ministry also asked industry bodies to decide on the “modalities” required for the removal of the ‘lesser duty rule’ with adequate justification.
It also sought justification for “designating specific ports of entry for clearly identified products”.
“Violations of QCO cases must be highlighted to the ministry so that these are taken up with concerned officials,” a ministry official present at the meeting reportedly told the industry bodies and other representatives.
The ministry reportedly assured that instances flagged earlier, including inappropriate observations by customs officials, would be taken up with competent authorities.
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