Steel imports under scanner, ministry to review situation

The Steel Ministry is watching the rising trend in steel imports for the last few months, mostly from China, and would review the situation next month to consider any suitable action.

"There had been 22-23% rise in steel product imports during the April-August period over the corresponding period last year. We are watching the situation," Joint Secretary in the Steel Ministry Syedain Abbasi said here.

"If the trend continues, we may consider suggesting steps after review by October," he said after the Bengal Chamber organised Steel Round Table.

The industry has witnessed a sharp rise in steel rebars import from China as well as alloy steel. The possible step could be revising import duty.

At present, steel import duty is at 7.5% and it could be hiked to a level of 15% without violating WTO norms, Abbasi said.

The Ministry already alerted the customs department to check the standards and match the quality certifications of the imports, as an immediate step.

If the current trend continues, India will import around 6 million tonnes of steel against 5 million tonnes last year.

Abbasi said compared with other manufacturing sectors, steel imports of up to five% of domestic production at the current import duty level cannot be termed bad for various reasons. However, more import is definitely not desirable.

As there had been supply side constraints of iron ore to the steel industry, India will be lucky it it achieves 135 million tonnes of production in FY 2015, Abbasi said.

Last year, the ironore production was 150 million tonne and a year before that was 200 million tonne.

In order to increase iron ore availability to the domestic industry, the steel ministry suggested that the government allow captive mine owners to sell in open market, aggregating small mines and then auction to increase viability and quick renew of leases of the mines.

Steelmakers like Tata Steel and SAIL may likely to face trouble as the Jharkhand government ordered closure of 12 working iron ore mines in West Singhbhum district, running under second and third subsequent deemed renewal.