PMO vetting note to raise minimum import price of steel prods

The Prime Minister's Office (PMO) is vetting a proposal for increasing minimum import price (MIP) of some steel products, a Union minister said today.
The proposal, moved by the ministries of commerce and steel, seeks to fix a minimum price for 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 by domestic steel companies.
"The ministry is looking into the industry's suggestion to impose MIP on steel products and it has been sent to PMO last week," Minister of State for Steel Vishnu Deo Sai said at an event organised by industry body Assocham here.

When asked about the announcement of the same as Prime Minister Narendra Modi left for Russia today on a two-day visit, he said the present government is known for its prompt action and it will be announced as soon as possible.
Sources said ministries of Commerce and Steel, which are discussing the matter, have proposed a floor price for over 30 products below which imports would not be allowed.
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.
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. Steel sector is a major contributor to the NPA woes of public sector banks.
Speaking at the event, Sai said talks are on with state-run iron ore miner NMDC to explore the possibility of further reduction in prices of the ore.

On the ultra mega steel projects, he said the investment in setting up four projects will cross Rs 1.5 lakh crore as the government aims that each plant should have a capacity to produce 60 lakh tonnes of steel.
He said the Centre has inked agreements with Jharkhand and Chhattisgarh in this regard and is in talks with Karnataka for a three million tonne steel plant.
The recently constituted National Mineral Exploration Trust (NMET) is focusing on exploration of coking coal resources across India to make India self-reliant in terms of the resource help save valuable foreign currency, he added.

Sai also called for promoting research and development in the steel sector to achieve long-term goals.
"We are aiming for steel firms to invest about one per cent of their total sales business on research and development so that government is able to fulfil growing demand as part of 'Make in India' initiative," the Minister said.