India’s ministry of steel has communicated with its counterparts at the ministry of finance seeking the doubling of import duty on steel to 15 percent, government sources said on Thursday, October 3.
For the first time acknowledging that steel imports from China have surged to 33 percent of total steel imports into the country, the ministry of steel said the doubling of import duty would be in line with similar safeguards against imports imposed by the US and the European Union (EU).
The ministry stated that “all-new capacities being added to the region are mainland Chinese investments targeting export markets like India” in its communication to the ministry of finance, sources said citing from the communication.
It urged “intervention” to address the “pressing issue” of the surge in imports and the exploration of the possibility of doubling basic customs duty (BCD) “to 15 percent on steel products to safeguard the interests of the domestic steel industry”.
It also underlined that the India-ASEAN free trade agreement (FTA) is being used to route lower-priced metal from China or from steel mills in South Asian nations that have direct investments from China.
“The current import price of steel products from China is significantly lower than the domestic price at the 7.5 percent BCD. Our assessment indicates that, even if the BCD is increased, the import price would still be lower than the domestic price,” the ministry of steel said in the communication.
Despite a consistent increase in steel inventory over the last two years, imports have continued to rise, indicating a concerning trend whereby imported steel is increasingly displacing domestically produced steel in the market, the ministry said.