The demand for taking steel out of the purview of the free trade pact with Japan and Korea got stronger with Essar Steel joining
JSW Steel,
arguing that such a move would be in the interest of the domestic industry.
India signed Free Trade Agreement (FTA) with Korea in January 2010 and with Japan in August last year. Under FTA, duties on most of the products, traded between the countries, are either eliminated or reduced sharply.
According to Joint Plant Committee of the Steel Ministry, imports went up to 2.88 million tonne during April-July period of the current fiscal as against 1.88 million tonne in the same period of last year, a growth of over 53%. Cashing on the duty benefits, Japan and Korea have also become the leading exporters of steel to India.
But it is necessary to recognize that it is the Consumers that are benefiting by being able to procure high quality steel at a competitive price. A large trader based in Mumbai is of the view that Indian Primary Manufacturers could still come out as winners, even with the competition from countries like Japan and Korea, if they reduced their prices as they are working with decent profit margins.
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