GAIL India is imposing the guidelines of the policy to prefer domestic products over imports on all present and future tenders. GAIL had recently cancelled the tender for procurement of steel for its Jagdishpur-Haldia pipeline to give preference to local manufacturers.
Under the existing support mechanisms for the domestic steel industry, the Centre provides a minimum value addition of 15 per cent on the notified steel products to boost domestic steel consumption. The government has also continued with anti-dumping provisions to check import of cheaper Chinese steel.
In May’17, India imposed definitive anti dumping duty on HRC, MS plates and CRC for period of 5 years. Anti dumping duty imposed on CRC imported from countries China PR, Japan, Korea RP, or Ukraine while anti dumping imposed on HRC and MS plates from countries namely from China PR, Japan, Korea RP, Ukraine, Russia, Brazil and Indonesia.
The government may re-evaluate its support to domestic steel manufacturers if they do not price products ‘responsibly’. Speaking at an Assocham summit, Syedain Abbasi, Joint Secretary at Ministry of Steel, said, “While we are willing to give protection, it comes with a sense of responsibility so please be responsible, otherwise charges of cartelisation become very difficult to fend off as prices start rising dramatically.”
Abbasi hinted that the government may withdraw protection to the industry if prices of domestic steel go beyond a certain level. He said, “It would become untenable for us to continue (with import restrictions and price preference) if you suddenly find that the prices in the next tender for GAIL pipeline have gone up by 30 per cent.”
He stated that it is not in the government’s interest to buy steel at prices which are very high. He said, “Then if people gather and say that look these controls have to go then ultimately it will be the pipe industry which will be the loser.”
Abassi said double taxation has largely been phased out under the Goods and Services Tax (GST) regime and it will be marginally beneficial for the steel sector as the duty on raw material will be lowered by 1 to 1.5 per cent.
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