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Major steel consuming small and medium industries have moved the Government against steel manufacturers association plea to impose 25 per cent duty on steel imports.
In a letter addressed to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman the user industry had said that imports as of May account for less than 4.68 per cent of the country’s total gross production.
The claim of steel companies that South Korea, Japan and China have diverted big volumes to India due to trade barriers imposed by the US and EU is false as the three countries export very little to the US, said the user industry.
Safeguard measures are in response to sudden surge in imports, but in reality imports have come down in last three years due to protective measures taken since September 2015, said the letter also addressed to the commerce, steel and MSME ministers.
Earlier, the Indian Steel Alliance – primary steel producers body – had petitioned the Directorate General of Trade Remedies for levying 25 per cent safeguard duty on wide range of steel items imported.
While the safeguard duty lapsed a few months ago, the anti-dumping duty is in place on most steel items. Steel prices in India are substantially higher compared to international prices.
With the 12.5 per cent customs duty and surcharge of 10 per cent on most flat steel products, imports from China, Europe and Commonwealth states have become unviable, said the steel user industry represented by associations such as Hooghly Chamber of Commerce and Industry, Steel Chamber of India and Federation of Industries of India.
Vaibhav Purohit, spokesperson of Citizen Civic Solutions Foundation which is coordinating with the steel users associations said levy of safeguard duty on steel imports will help only a few steel mills to create a monopolistic market in India and give rise to agitation among steel users, traders, SMEs and MSMEs.
Citizen Civic Solutions is a non-governmental and not-for-profit organisation which supports public interest.
If the import duty is hiked, MSMEs have to either cut output due to non-availability of steel or shut down shops leading to increase in unemployment in the country, said the letter.
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