The Indian Steel Association (ISA) has raised concerns regarding import of steel from Iran with the Indian Banks Association (IBA).
Surging steel imports from Iran routed via UAE were at predatory prices and a cause of concern for the industry, the association pointed out in a recent letter to the IBA.
The price difference was around Rs 5,000 a tonne when compared to China, said sources. Apart from the IBA, the association has also raised it with the steel ministry and custom authorities.
The letter also said that Indian steel imports from Iran were in contravention of US Sanctions having serious implications under CAATSA (Countering America's Adversaries Through Sanctions Act).
In FY18, Indian steel imports from Iran were sharply up by 66 per cent. However, FY19, Iran recorded nil imports, trade sources said. The alloy was reportedly routed via UAE.
Industry officials said, Indian traders had booked 72,000 tonnes of steel to be imported from Iran and around 52,000 tonnes would get delivered in May.
Illegal imports from Iran at predatory prices will hurt the domestic steel makers especially when the domestic demand continues to remain subdued, a domestic steel producer said. "If not checked, India will become a favourite dumping ground since all other export markets are blocked for Iranian exports due to US Sanctions," he said.
The ISA took to alerting the IBA to ensure that banks running the US dollar book were alerted to the transactions irrespective of the currency of transaction.
Iran exports approximately 30 per cent steel to ASEAN. Over the past eight years, its surplus has risen by 12 million tonnes or 36 per cent of the total capacity while per capita consumption dropped by 14 per cent to 240 kg. Export intensity, on the other hand, increased from two per cent in 2011 to 37 per cent.