Seeking to allay concerns of the Indian steel industry over free trade agreements, senior commerce ministry officials today said imports from Japan and S Korea are "certainly" positive outcomes of these pacts as it is mainly consumed by automobile industry meant for exports.
The industry has demanded from the government that steel products should be excluded from the ambit of free trade agreement (FTA) with Japan and Korea as these countries are flooding the Indian market, taking advantage of concessional duty rates at the cost of domestic firms.
"Some special steel imports from S Korea and Japan have gone up and these are mostly we believe are auto steels... intermediate goods in the form of special steels are coming in and getting converted into automobiles and we export that. That certainly are positive things of FTA with S Korea and Japan," an official said.
India had implemented comprehensive FTAs with Korea in 2010 and with Japan in 2011. Under FTA, duties on most of the products, traded between the countries, are in the process of either elimination or reduction. Duties in the related cases come to zero levels in phases.
According to industry experts import duty on Korean and Japanese steel products has been reduced to 3.13 per cent from five per cent. Imports from other geographies attract 7.5 per cent import duty.
During April- September period of 2014-15, overall steel imports grew by about 27 per cent to 3.8 million tonnes (MT). During 2013-14, imports dipped by 31.3% to 5.44 MT over 2012-13.
Further talking about ways of doing investments by Japanese and Koreans, the officials said that they look at taxes around which they are competitive.
