Government may fix minimum import price for steel products this week
New Delhi: Ministries of Commerce and Steel are close to finalising the minimum import price of about 30-35 steel products, which is likely to be announced this week. The government wants to fix a minimum price for the in-bound shipment of certain steel products in a bid to check cheap imports, which are adversely impacting domestic industry and can jeopardise billions of dollars of investment that the steel companies have made for capacity expansion.
Ministries of Commerce and Steel, which are discussing the matter, have proposed a floor price for over 30 products below which imports into the country would not be allowed, sources said. "Both the ministries have been holding meeting since the last several days to finalise the number of items which should be included in the MIP list. This list and the price is expected to be finalised this week," they said.
Earlier, the steel ministry had asked for 35-40 products, including pig iron, semi-finished products and cold-rolled coils, to be included in the list, while Commerce Ministry asked them to prune it. The domestic steel industry is facing a tough situation due to cheap imports from countries such as China, Japan, South Korea and Russia, among others. Steel companies have taken huge loans for capacity expansion and are under severe stress as cheap imports are eating into their domestic share, a senior government official said.
Public sector banks are saddled with gross non-performing assets (NPAs) of around Rs 2.67 lakh crore at the end of March 2015. Gross NPA of the all banks was about Rs 3.09 lakh crore during the same period. The steel sector is a major contributor to the NPA or bad loan woes of the public sector banks. The government's move to impose MIP comes even as it has initiated several measures to check imports.
The government has imposed anti-dumping duty of up to 57.39 per cent on import of certain stainless steel products from China, Korea, the US and EU for five years to save the domestic industry from cheap shipments. Besides, SAIL, Essar Steel, JSW Steel and Jindal Steel & Power moved the Directorate General of Safeguards for imposing levy on imports of 'hot-rolled flat sheets and plates of alloy or non-alloy steel' to "protect the domestic producers" from increased imports.
In September, India imposed a provisional safeguard duty of 20 per cent on import of hot-rolled flat products of non-alloy and other alloy steel, applicable for 200 days. In August, the government had hiked import duty on base metals, including iron and steel, by 2.5 per cent, in a move aimed at helping domestic players battle out cheap Chinese imports after the currency devaluation by China. In June, India also slapped anti-dumping duty of up to USD 316 per tonne on imports of certain steel products from three countries, including China.
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