India ready to impose more curbs on steel imports

By Manoj Kumar

NEW DELHI (Reuters) - India is readying to impose more curbs on steel imports, including introducing a safeguard duty, after a 20 percent import tax failed to contain losses for producers such as Steel Authority of India.

SAIL, JSW Steel and Essar Steel have complained that surging imports from Indonesia, China, Japan, Russia, Ukraine and South Korea were squeezing their market share and profit margins.

In October, steelmakers asked the government to impose a safeguard duty for four years on imports of hot rolled flat sheets and plates of alloy or non-alloy steel, and set a minimum import price, to contain cheaper steel imports.

The Directorate General of Safeguards, a branch of the finance ministry that can impose temporary import curbs, said on Tuesday that it found prima facie evidence that increases in imports "have caused or threatening to cause serious injury to the domestic producers".

In a statement on its website, the directorate said it has asked foreign companies and other stake holders to submit their views within 30 days before taking a decision.

Indian companies, struggling to compete due to high borrowing and raw materials costs, have in recent months successfully lobbied to get duties on some products and quality checks strengthened.

In September, India imposed the 20 percent import tax on some steel products as the government initiated an investigation into rising imports from China, Japan, South Korea and Russia.

Government sources said the steel ministry has also supported local manufacturers' demand to impose a minimum floor price for steel imports to curb cheaper imports.

Imports of iron and steel declined slightly to $6.9 billion during April-October period in the current financial year 2015/16 from $7.1 billion a year ago, Commerce and Industry Ministry data show.

The government has asked the industry to submit figures on the cost of production so that it could consider a floor price for imports, said one official, with knowledge of policy decisions.

(Reporting by Manoj Kumar; Editing by Douglas Busvine and Susan Fenton)