India’s steel mills are pushing for safeguard measures including 8-12 per cent duty imposition on “all” steel shipments, especially those coming from countries like China. 

A pitch has also been made, in a recent meeting with Steel Ministry officials, to push for inclusion of the steel industry under RoDTEP scheme. This will give them a level playing field. 

Additional cost

Industry sources say steelmakers face 8-12 per cent additional cost which need to be reimbursed. These are taxes which are generally not subsumed in GST and other taxes. 

This could be through the RoDTEP scheme or there be safeguards against rising imports.

Mills through their association – Indian Steel Association, that includes largest private players such as JSW, Tata Steel, AMNS India, JSPL and PSU majors such as SAIL and RINL – have approached the Minister, Jyotiraditya Scindia, and sought for imposition of safeguards, on the lines of EU’s quota system and border adjustment mechanism. 

The proposed measure is being pushed under the name of Bharat Border Adjustment Mechanism (BBAM), like the EU’s CBAM (Carbon Border Adjustment Mechanism). The latter is already under implementation. 

“BBAM is proposed, under which 8-12 per cent or at least 8 per cent duty under of proposed BBAM duty needs to be levied on all steel imports,” a letter to the Minister reads. 

Rise in Imports 

Incidentally, India has witnessed a substantial spurt in steel imports, at 4.3 mt for April to November period, with one out of every three shipments coming in from China. Chinese shipments are up by nearly 50 per cent YoY, while shipments from Vietnam – which are mostly of Chinese origin – is up nearly 500 per cent, data show.  

In view of mounting pressure, a meeting was held between the Ministry officials and industry participants in December where a variety of proposals, including safeguard measures, were discussed. 

The industry was asked to present its case “with appropriate justification” as to why protectionist measures were required. Measures under discussion include imposing tariff rate quotas (like it exists in the EU); testing and surveillance at ports, primarily at JNPT which sees the highest shipments come-in (40 per cent rise YoY) or levying punitive duties such as countervailing or anti-dumping duties while doing away with the lesser duty rule’. 

Ministry officials in the know told businessline that they were looking into the issue of rising imports and strengthening rules of origin (of import shipments) and tightening melt-and-pour norms (for final products). 

Those in the know said import of non-prime material is a matter of concern. Non-prime steel imports into India during April-October 2023, as per last available data with the Ministry, across categories like cold rolled items is at 13 per cent, coated steel at 10 per cent (of total imports) and these are “violation of quality control orders”. 

These non-prime steels are imported into India at abnormally low prices. Re-routing of imports was taking place, in violation of country-of-origin rules that are framed under free trade agreement rules. 

Domestic demand for steel in India is expected to 178 million tonnes (mt) by 2030-31 and capacity addition by integrated steel players will be around 70 mt by 2030, with total capacity going up to 233 mt.

Vulnerability of Indian Steel

The ISA in a letter to the Ministry has presented its case by pointing out that India remains vulnerable to China’s financial clout, due to its inability to counter subsidies with prevailing “archaic” lesser duty rule.

Indian producers also face inverted duty structure in import of raw material for making steel, which is not accounted for.

In comparison, China gives further subsidises to its steel industry. And 60 per cent steel arriving from FTA countries come-in duty free. Some of these FTA countries have excess steel stocks which are being pushed into Indian markets where demand continues to be in double digits.

“The Indian industry is facing an adverse situation,” it said, adding that the proposed BBAM will also help India counter partly the threat of diversion of imports due to EU-CBAM.