The government is unlikely to levy any safeguard duty on steel imports as demanded by industry leaders, said P K Rastogi, secretary, ministry of steel, in the sideline of a steel seminar in Mumbai on Tuesday.
Recently two steel majors including private sector leader Tata Steel and the public-sector Steel Authority of India (SAIL) had sought government protection from dumping by Chinese. They have proposed a 25 per cent levy of safeguard duty. The proposal was rejected by the government’s standing board members including secretaries of steel, commerce and revenue department.
The standing board found no merit in the proposal and therefore, rejected the proposal, Rastogi said. However, he admitted that there were cases of dumping of steel products into India from China.
Companies were not fully prepared to advocate their case strongly. When asked about the possibility of the fresh proposal by the two steel biggies, Rastogi said, “Above all, we need to protect our consumers’ interest which is the top priority of the government and hence, do not see any need for any safeguard duty, anti dumping duty of any such other levies.”
Rastogi was speaking at the “5th Indian Steel 09”, the two-day metal conference, organised by Metaljunction and Metalbulletin.
“We have strong cases of dumping which in itself is self explanatory for the need of government protection,” Seshagiri Rao, joint managing director and group CFO of JSW Steel said.
According to Rao, Chinese steel industry is subsidised by the government and therefore, selling prices in China are lower than that in India. Steel prices are quoted in a very close range with European countries.
Meanwhile, Rastogi estimated that India’s steel demand will rise 5 per cent during the present financial year on the prevailing scenario. But, if the economy recovers as indicated, the demand may rise upto the highest single digit, he added.
During the last fiscal, domestic steel production surged 0.57 per cent while consumption fell 0.5 per cent. While the production and consumption of the metal directly proportional to the economic growth, grew 4.3 per cent and 5.6 per cent respectively in the combined first two quarters, the third quarter saw a massive fall of 7.8 per cent and 13.6 per cent respectively. The fourth quarter, however, witnessed a recovery of 1.2 per cent in production and 3.8 per cent in consumption.
Steel demand will be driven by huge infrastructure spending across the country for which the local government has announced three stimulus packages.
Unlike other countries where growth is limited mainly to urban areas, demand will pick up from rural India too which constitutes over 65 per cent of steel consumption.
