Posted on 16 Mar 2015
With imports set to hit a record high in the current
fiscal, steel-makers today urged the government to bring the provisioned customs
duty hike in the Budget into effect immediately to bail them out of the
deepening crisis.
"Some secondary steel producers have already resorted to production cut
and instead of making on their own, they have now ventured into trading
importing from China and other countries," Jayant Acharya, Director
(Commercial), JSW Steel, told PTI.
Facing a host of other problems such as higher production cost due to dearer
raw materials and inflated interest rates, major producers are also left with
no money to further invest, which is tantamount to government's "Make in
India" programme.
"Government should implement the enabling budgetary provision for raising
the customs duty as soon as possible to give steel-makers a little
elbowroom," Acharya said.
He also added that some non-tariff barriers to be put in place to safeguard
against the abnormal surge in imports.
Paying heed to steel-makers' plea, the Union Budget has created a possibility
of raising import duty for steels to 15 per cent from 10 per cent now, aimed at
protecting the home-grown firms from rising imports. But, it has been kept as
an enabling provision for suitable imposition.
Meanwhile, imports have jumped by over 67 per cent during April-February period
of current fiscal to 8.39 million tonnes (MT) while exports have declined by 11
per cent to 4.8 MT. The total imports might go to around 10 MT by March-end, he
said.
"At 8.39 MT now, I think India's steel imports will hit a record high in
current year," said A S Firoz, Chief Economist, Joint Plant Committee, a
unit under the Steel Ministry. India had imported 5.44 MT steel during the
entire last fiscal.
"If the current international prices remain so low, then obviously there
will be more imports and it will increasingly be difficult for domestic firms
to do exports," Firoz added.
He said the basic reason for growing imports and dipping exports is that Indian
steel-makers are unable to compete in international market due to input costs
and other "external hurdles" such as infrastructure and efficient
labour among others.
An official from a private sector steelmaker said even as NMDC has reduced the
price for iron ore, it has to do more to make them compatible with the
prevailing international price.
NMDC has cut prices of the raw material for consecutive two months, but the
official described the move as "it's too little, too late".
Apart from Tata Steel and SAIL, most Indian steel-makers do not have captive
mines. Even, Tata Steel had to resort to imports for the first time in its
100-year history as iron ore was not adequately available in the country.
