New Delhi: On the plea of domestic steelmakers, government is soon expected to initiate measures to counter cheap and galloping imports from China, the world's largest producer. "Steel companies have written to me and we are discussing the issue which will be resolved soon. Give us time for a day or two," Steel and Mines Minister Narendra Singh Tomar said when asked if the government was mulling to take measures in view of the rising steel imports from China.
Steel firms and their representative body, India Steel Association, recently wrote to the Steel Ministry seeking its intervention on the galloping imports from China. Reaping benefit from a host of advantages including lower rate of interest, cheaper raw material and encouragement from the government, Chinese steelmakers are increasingly exporting steel, impacting both large, medium and small steel makers in India.
They are also sending steel right from the basic grade to high-quality bypassing Indian standards and circumventing the existing duties, both levied by India and China, and taking advantage of their lower cost of production, as per the industry. India levies between 2.5 per cent and 10 per cent on imports of various grade of steel.
According to Joint Plant Committee, a unit under the ministry, imports from China have surged by a whopping 108 per cent during the April-September period of the current fiscal to 1.34 million tonnes (MT). During the period, India's total imports rose by 27 per cent to 3.86 MT. "Their export price is at par or even lower compared to the cost of production in India. They are benefiting from a host of advantages such as lower interest rate and cheaper raw material. The Chinese government also encourages exports," said Ganesh Pai, spokesperson, Essar Steel. He said most Indian companies are not in a position to bring down their cost of production as domestic iron ore prices are still ruling high even as globally the price of the raw material has nosedived to its five-year low. Chinese mills are getting their raw material cheaper.
There is also a compulsion for the Chinese steel makers to export products in other countries as their domestic demand is slowing down in the wake of a subdued economy. Production, on the other hand, has been on the rise. It rose to 618 million tonnes in the first nine months of current year, up by 2.3 per cent from the same period a year earlier. Global production rose to 1,231 million tonnes during January- September period. A senior economist with a think-tank said that the issue of Chinese export into India has assumed a serious proportion and if the government does not initiate steps now, it will turn out to be a very big problem for domestic steel makers.
