MIP impact on steel imports, price realisation not as expected

Even though Minimum Import Price (MIP) levied on steel products helped check imports and shore up price relisation, but its impact was "not as expected", Parliament was informed today.
"MIP has had a salutary effect on the domestic steel industry in terms of putting a check on the quantum of imports and helping the industry to improve price realisations, though not as expected," Minister of State for Finance Arjun Ram Meghwal said in a written reply to Lok Sabha.
Current prices are still below the reference MIP prices and the imports under the notified tariff lines, at below MIP, are yet to be arrested, either due to previously opened letter of credits (LCs) or under advance authorisation scheme, the Minister added.

Last week, government extended the minimum import price (MIP) on steel products by two months, but pruned the list from 173 products to 66. It said rest of the products will be brought under anti-dumping duty, which is a better protection mechanism. MIP was first imposed in February on 173 products.
On continuation of MIP, Meghwal said: "MIP was restored too because imports were coming into the country at prices which were reportedly been below variable cost of production in some countries, on account of the global steel overcapacity which was an unfair tactic being resorted to by some international steel producers, which needed to be countered."

Steel Ministry had conducted an internal study to assess the cost of production of domestic steel producers and also the domestic sale prices of major steel producing countries like Europe, Japan, South Korea and the US before notifying the MIP on steel products, he added.
"The government has not done any impact assessment study with respect to MIP on steel products," the Minister said.