The Indian steel industry, reeling from the double impact of declining demand and production cuts, could be in for an even bigger challenge as China plans to lift export restrictions from December this year.
China had earlier levied an export duty of 15 per cent to discourage exports during the boom period, but with the current slowdown hitting its steel industry hard, China is increasingly looking at exports to support the industry.
The Indian primary steel makers feel they will be severely hit by China dumping its steel in the Indian market. The threat of cheap imports from China has prompted the primary steel makers to urge the government to take urgent steps to check cheap imports. They have demanded that the government should impose import duty in the range of 5 per cent to 10 per cent.
In response, the government has initiated measures such as withdrawal of export duties on certain iron and steel products. Indian steel manufacturers maintain that the Chinese government subsidises raw materials for the manufacturers which lowers cost of production. They point out that Chinese manufacturers were getting coke at $ 300 per tonne when the prices in the international markets were ruling at $550 per tonne. This places Indian manufacturers at a distinct disadvantage, they point out.
P K Rastogi, secretary in the steel ministry, said the ministry has written to the finance ministry again for import duty imposition after the first request was turned down. With certain details provided in the new request for anti-dumping measures, the ministry hopes to impress the finance ministry of the gravity of the situation and to accept the demand for imposition of import duty.
Meanwhile, the Cold Rolled Steel Manufacturers' Association (Corsma) has written to the finance ministry urging it not to go ahead with the imposition of import duties as per the steel ministry's recommendations. Corsma, which represents secondary steel producers, has, in its letter has asked the government to refrain from intervening in the interest of the primary manufacturers, as availability of key inputs at fair prices is key to industrial growth.