(MENAFN- KNN India)
New Delhi, Dec 21 (KNN)
The Indian government faces a critical decision as it considers imposing a 25 per cent duty on steel imports, a move aimed at countering an 80 per cent surge in Chinese steel imports from 0.9 million tonnes in January–July 2022 to 1.61 million tonnes in the same period this year.
While the Ministry of Steel advocates for the duty to safeguard domestic producers, Micro, Small, and Medium Enterprises (MSMEs) warn that such a measure could adversely affect over 800,000 small businesses reliant on affordable steel.
The Indian Steel Association (ISA), representing leading firms like JSW Steel and ArcelorMittal Nippon Steel India, has petitioned the Directorate General of Trade Remedies (DGTR) for a safeguard duty on“Non-Alloy and Alloy Steel Flat Products.”
Citing a "sudden and significant" rise in imports, the ISA claims the influx has caused severe injury to the domestic industry.
The association attributes the surge to global overcapacity, particularly in China, where declining domestic demand has prompted steelmakers to pivot from long products, used in real estate, to flat products for export.
Global trade dynamics further complicate the issue. With countries like the U.S. imposing protective tariffs under Section 232, India risks becoming a dumping ground for surplus steel.
Between 2019 and 2023, 129 trade remedy measures were introduced worldwide to address steel overcapacity, underscoring the sector's volatility.
Despite these concerns, think tank GTRI highlights that steel imports constitute just 6 per cent of India's production, with half consisting of raw materials and specialised products unavailable domestically.
India's domestic demand outpaced production, leaving little surplus and necessitating imports. Meanwhile, ICRA predicts a drop in domestic steel industry capacity utilisation to 78 per cent in 2024–25, the lowest in four years, due to rising imports and record expansion plans.
The ASEAN region's burgeoning steel capacity, fuelled by Chinese investments, adds another layer of complexity.
As India deliberates, balancing the interests of domestic producers and downstream industries remains a pressing challenge.
A decision on the duty could reshape India's steel landscape and its position in global trade.
(KNN Bureau)
MENAFN21122024000155011030ID1109019753
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.