The
domestic steel industry has requested the government to increase the basic
customs duty on steel imports and levy an additional 25% safeguard duty on the
alloy in the upcoming Union budget to counter dumping of steel from countries
such as Japan, South Korea, China and Russia into the Indian market.
The import duty on finished steel products was slashed to 7.5% in the budget
for 2021-22. The Indian Steel Association (ISA),
a lobby for domestic steelmakers, has written to the finance minister,
requesting to restore the duty to 12.5% for flat steel products and increase it
to 10% for long products.
About 60% of the steel imports come from countries which India has
a free trade agreement with, thus attracting zero basic customs duty. To
counter dumping from these countries, steelmakers want a 25% safeguard duty on
imports.
India became a net importer of steel during the December quarter, with imports displacing 8% of the domestic steel demand, said the association.
Steelmakers argue that several countries are dumping their excess steel production into India at prices far lower than in their own domestic markets. With imported steel becoming cheaper, domestic manufacturers claim that they are being forced to cut prices to unsustainably low levels.