Indian government is unlikely to further extend the minimum import price (MIP) on all steel products beyond October 4, according to sources.
After the government proposed provisional anti-dumping duty on 15 wire rod of alloy or non-alloy products last week, steel ministry had requested the commerce ministry to continue with the MIP on these 21 flat-rolled products of non-alloy steel such as corrugated sheets of 600 mm width or more, while suggesting no actions for 30 other semi-finished items such as billets, blooms and slabs on ground that imports of these items were not significant.
Aimed at reining in galloping imports, the government had imposed MIP on 173 steel products in the range between $341-752 per tonne for six months. In August, it replaced MIP with anti-dumping duty on certain HR Coil and CR Coil from nations with excess capacity such as China, Japan and Korea on most of these items, leaving 66 items to continue protection under MIP.
While MIP and endless other measures helped primary producers a lot. MIPs become redundant once the dumping duties are imposed. India has been under pressure in multilateral fora to remove the MIPs seen as an outdated measure that is WTO-incompatible.
Indian Steel Association (ISA) had also sought continuation of MIP on all these 66 products, for another six months, contending that the situation would be affected adversely if these items are imported at dismally low prices leading to an unwarranted glut in the domestic market.
Steel imports to India increased to 12.7 MT, at an average of over 1 MT a month, in 2015-16 from 10.2 MT in 2014-15 and 5.7 MT in 2013-14.
Government has also taken measures to bail out the domestic steel industry was reeling under severe stress for the last two years due to imports at predatory prices, subdued demand and poor prices.
It raised the rate of basic customs on both flat and non-flat steel to 15% from 10% in the Budget for 2016-17 and hiked import duty in August 2015 on flat steel from 10% to 12.5%, long steel from 7.5% to 10% and semi-finished steel from 7.5% to 10%.
In June, 2015 it imposed anti-dumping duty for five years on imports of certain varieties of stainless steel from China ($309 per tonne), Korea ($180 per tonne) and Malaysia ($316 per tonne). Further, safeguard duty of 20% was imposed in March 2016 on hot-rolled flat products of non-alloy and other alloy steel, on coils of width of 600 mm or more.
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