Government to soon take action to counter steel imports from China

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.