Economy

Govt to prune steel items covered by MIP

Suresh P Iyengar Mumbai | Updated on January 17, 2018 Published on July 20, 2016

BL21_P5_STEEL

Pressure from exporting countries and small scale industries behind move





Bowing to intense pressure from exporting countries and Indian small scale industries, the Centre plans to prune the list of steel products covered by the Minimum Import Price (MIP).

Major steel exporting countries such as China, Japan, Canada, Australia and Korea raked up the punitive tax issue at the recent goods council meeting of the WTO and asked India to justify the duty even as the domestic demand is looking up.

“Sustaining with MIP for long is untenable. Anyway, it was a temporary solution. We are considering removing some items from the list and speed up the decision on an anti-dumping duty,” said a source.

There are also representations from small scale industries decrying the undue protection given to large steel companies, the source added.

Large-scale dumping

In a bid to protect the domestic steel industry from large-scale steel dumping by China, the Centre imposed a provisional safeguard import duty on a few steel products for 200 days last September and extended it till March 2018.

Last February, the Centre plugged duty evasion by imposing an MIP ranging from $341 a tonne to $752 a tonne on 173 categories of steel products. It is coming up for review in August.

In April, the Directorate General of Anti-Dumping and Allied Duties initiated a probe on alleged steel dumping by China, Japan, Russia, Korea, Brazil and Indonesia, based on complaints made by Steel Authority of India, JSW Steel and Essar Steel.

The plea was supported by Tata Steel and Jindal Steel and Power. The anti-dumping duty, once finalised, will be a permanent fixture with longer tenure, unlike the present safeguard duty and MIP.

Steel imports declined 33 per cent in June to 5.97 lakh tonnes. In the June quarter, it was down 31 per cent to 1.8 million tonnes. Import restrictions have prevented small scale industry and value added steel product producers from taking advantage of low steel prices prevailing in global markets.

Uttam Galva Steels, which was importing basic steel coils at a much cheaper price and selling value added galvanised products, had to put its assets on the block and file for protection under the Board for Industrial and Financial Reconstruction after the levy on steel imports.

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Published on July 20, 2016
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