India’s Ministry of Commerce, which is participating in an inter-ministerial committee to study the impact of steel imports on the domestic industry, has stated that it is too early to conclude that cheap imports are hurting local steel mills, an official at India’s Ministry of Steel and Mines said on Monday, September 7.
While the inter-ministerial committee, comprising representatives from the ministries of steel and mines, commerce and finance is due to draw up a final report, the Ministry of Commerce stated that a holistic view of steel trade indicates that rising steel imports into the country are matched by the increase in steel exports by Indian steel mills, the official said.
According to the Ministry of Commerce, any market assessment will need to take into account the overall two-way trading conditions and not steel imports in isolation, since a large number of user industries in infrastructure, automobiles and consumer durable sectors benefit from low prices of imports of steel products, the official said.
In its preliminary submissions, the Ministry of Commerce has taken the stance that hasty over-protection of domestic steel mills will prove counter-productive, adding that viable assessment of impact of steel imports will have to be done over a longer period, as stated by the steel ministry official.
Citing data in value terms, the commerce ministry maintained that, despite rising steel imports, the Indian trade deficit from steel in the April-June period this year was negligible at $0.5 billion, with imports valued at $2.6 billion and exports at $2.10 billion.
Only a sustained and larger trade deficit based on the long-term trade pattern may warrant government intervention in the market in form of tariff protection, the commerce ministry stated.
However, according to the steel ministry official, the Indian government will now need to reconcile the conflicting stands of the steel and mines ministry and the commerce ministry before the final decision of the inter-ministerial committee is issued.