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Suresh P Iyengar
The increase in number of items covered under the Steel Import Monitoring System (SIMS) from 250 items to 352 is expected to slow down imports and encourage consumers to source domestically .
The SIMS was introduced in November 2019 for 250 specified iron and steel items.
Under the SIMS, importers have to submit advance information through an online system and obtain an automatic registration number by paying a fee of ₹1 per thousand subjects to a minimum of ₹500 and maximum of ₹1 lakh on CIF value. The automatic registration number would be valid for 75 days.
Bhaskar Chatterjee, Secretary-General, Indian Steel Association, said the mandatory registration on imports will improve the quality of products being shipped in and will stop the dumping of defectives and seconds (reused) steel. The circumvention of duty can also be plugged as few items are now being imported duty-free with minor value-addition in specific countries, he added.
Further, industry sources also believe that the compulsory registration of steel imports will help the industry collate data on the kind of items being imported and produce them domestically. The Steel Ministry has already proposed an incentive package of ₹3,350 crore under a production-linked incentive scheme and a phased manufacturing programme to boost the domestic production of the various grades of steel that are largely imported.
The fear
Sanjay Gosh, President, Amey Enterprises, which sources steel products for various capital goods projects, says, “The expansion of the registration list for steel imports will lead to a delay in shipments and increase the cost of specialised steel products that are not produced in India...”
Some of the new items included in the list for mandatory registration include certain flat-rolled products, stranded wire, ropes, cables; certain items of springs and leaves for springs of iron and steel; tubes, pipes and hollow profiles; diesel-electric locomotives; and parts of railways.
Manoj Kumar Jain, Director, Prithvi Finmart, said the move will certainly impact steel imports, but will also boost the revenues of Indian steel companies, which are incurring a higher finance cost compared to their global peers.
Steel imports into India have dropped sharply due to the fall in demand due the Covid pandemic. In fact, most of the domestic steel producers had to export about 60 per cent of their production as domestic demand was weak. Steel imports plunged 52 per cent to 1.67 million tonnes during the first five months of the fiscal, while it dipped 81 per cent to 1,62,000 tonnes in August.
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