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Steel ministry sought immediate hike in duties to deter Chinese imports

Jun 22,2019

The steel ministry seeks an immediate increase in import duties on finished steel products from a range of 7.5% to 12.5% to 15%, citing a threat from Chinese imports and excess global capacity. The steel ministry has proposed the higher duties to the finance ministry for the upcoming 2019/20 budget that is due out on July 5 as part of its recommendations.

 

"The U.S.-China trade war is threatening Indian markets as China looks for alternative markets" for its steel exports, the steel ministry said.

 

The ministry citing the vulnerability of local mills said the nation's steel sector needs protection from unfairly traded cheap steel imports as well as lower input costs. Peak rates for all steel products may be raised to 25% to meet any contingency arising from potential adverse global market turmoil. Existing countervailing and anti-dumping duties have been rendered ineffective by the volatility in steel prices.

 

Although it is the finance ministry that makes the final decision the steel ministry said government revenues could increase by 13.66 billion rupees ($196.1 million) if the import duties were implemented.

 

The steel and finance ministries did not immediately reply to Reuters emails seeking comment. India turned from net exporter to net importer of steel during the 2018/19 fiscal year as local demand increased and imports jumped from Japan, Korea, and China.

 

Japan, South Korea and member countries of the ASEAN, which all have free trade agreements on steel with India, accounted for 58% of its imports of the alloy, while 18% of its incoming steel came from China.

 

It was previously reported that India feared Chinese steel flooding its markets as fallout from Beijing's escalating trade war with Washington. The government data showed over 50% of India's imports of wire rods and bars - both long steel products used in construction - came from China last year.

 

India's top four steelmakers - state-owned Steel Authority of India Ltd (SAIL) JSW Steel Ltd, Tata Steel Ltd, and Jindal Steel and Power Ltd together control over 45% of India's total steel production. The producers have been complaining about steel being dumped into India for the last several months.

 

The ministry has also sought cuts to import duties on coking coal, steel scrap, and graphite electrodes to reduce raw material costs for making steel.