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.
Steel imports
surged 40% year-on-year to 5 million tonnes in April-December 2022, as per data
from the Joint Plant Committee, a government-backed institution. Meanwhile,
exports plunged 60% to 6 million tonnes during this period, primarily due to
the imposition of a 15% export duty by the government which has since been
revoked.
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.
“Globally, things are not OK, but
India is doing well. So, it is a target, and more and more steel will come to
India if the government doesn’t take any action,” Seshagiri Rao, joint managing
director of JSW Steel, told ET in a recent interview.