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With less than a month to go before the minimum import price (MIP) on 173 steel products expires, the domestic industry has written to the Ministry of Steel seeking its extension. The MIP has provided some relief to the industry in the past five months.
“We have written to the Steel Ministry as an industry, the Indian Steel Association has sent the letter requesting an extension of the MIP. Imports are still at around half a million tonne a month which was the level it was before the last year. I think 6-7 million tonnes a year is a sizeable amount of imports,” said TV Narendran, Managing Director, Tata Steel.
According to official data, in the first quarter of fiscal 2016-17, India imported 1.79 million tonnes of steel compared with 2.59 million tonnes in the previous fiscal. However, as compared with 2014-15, the steel imports are six per cent higher.
“For a country like China it is very easy to export. One per cent of their production is 8 million tonnes, which is equal to 10 per cent of our consumption. So without MIP, they can dump one per cent of their production here at very low and ridiculous prices. This completely destabilises the industry here. If MIP is not extended, many steel plants might close down here,” said Naveen Jindal, Chairman, Jindal Steel and Power Ltd.
The Steel Ministry has been sitting on the fence about the extension of the MIP. Steel Secretary Aruna Sundarajan said recently in Raipur that a decision on extending the MIP will be taken at an appropriate time. “We are very clear that there should be MIP until alternate measures are in place,” she said.
Steel demand in the country is growing at a slow pace and the industry feels that it could dip further if the MIP is not extended.
In the first quarter of 2016-17, steel consumption grew at 0.3 per cent to 19.879 million tonnes.
Jindal said that MIP has helped stabilise prices so far but demand is yet to improve. “Internationally and in India, demand has not really picked up so that is an issue that we are grappling with,” he said.
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