Steel imports down by a fourth in first 11 months of this fiscal

Steel Ministry has brought down the import of steel, an issue that has eroded profitability of the domestic producers, by almost one-fourth in the first eleven months of this fiscal.

“Through various measures like import and safeguard duty, minimum import price and quality control order, the ministry has curtailed steel imports by almost one-fourth in April-February period this fiscal,” Steel and Mines Minister Narendra Singh Tomar said. During last fiscal, imports of the metal had risen by about 71 per cent, he added.

The minister said the checks were needed to protect the domestic industry as the global downturn led to countries including China dumping cheap steel in India, which has impacted the sales and profits of the companies. According to data by Joint Plant Committee of the Steel Ministry, imports grew 71 per cent to 9.321 million tonnes (mt) in 2014-15 compared to the previous fiscal, with India remaining a net importer in the previous fiscal. Import of steel during the eleven months of the current fiscal grew 20.5 per cent to 10.215 mt, while inbound shipment in February 2016 decreased 0.1 per cent to 0.91 mt compared to previous month and was down 7.3 per cent against February 2015. This has been four consecutive months of decline in steel imports.

However, India remained a net importer of total finished steel in the current fiscal so far. Tomar said to protect the domestic producers, government has imposed a minimum import price in 174 steel products last month. In July and August last year, the peak customs duty was raised on steel to 15 per cent, while anti-dumping duty was imposed on certain grades of steel products during June and December 2015, he added.

Besides, a provisional safeguard duty of 20 per cent was levied on hot rolled steel coils for a period of six months, Tomar said. Speaking to reporters later, Tomar said India has become the world’s third largest steel producer last year leaving behind the US. “Since May 2014, steel companies, including state-run SAIL and RINL, have added 16 mt of capacity with an investment of around Rs 1 lakh crore,” he said. India’s steel production rose 7.9 per cent to 88.12 mt in 2014-15 fiscal compared with the previous fiscal.

On the ongoing first phase of mine auctions, Tomar said out of the 43 blocks offered, six have been auctioned. “The states will earn a total revenue of Rs 14,855 crore from these six blocks. In the second phase the 12-mineral bearing states will offer about 42 mineral blocks for auction, which will take place in the next fiscal,” he added. 

Tomar said Mines ministry has proposed to amend the MMDR Act to include provisions allowing transfer of captive mines granted through procedures other than auction.

It has prepared a draft Mines and Minerals (Development and Regulation) (Amendment) Bill, 2016 to amend Mines and Minerals (Development and Regulation) Act, 1957. The minister said the transfer of captive mining leases, granted otherwise through auction, would facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged.

It will soon be sent for the approval of the Cabinet and after that it will be placed in Parliament, he said. On the budget for 2016-17, Tomar said the decision to increase custom duty on zinc alloy will control the recent surge in imports. 

Removal of export duty on iron ore will encourage export of the ore, which is not being utilised in India and increase in custom duty by 2.5 per cent on aluminium will provide relief to the domestic industry, he added.

He also expressed confidence that the steel industry will benefit from increase in steel demand as a result of various decisions taken in the Budget. “A new policy to expand LPG connections to the poor and needy particularly in the rural areas will help raise demand for LPG grade HR Coils. The industry will directly benefit from this,” Tomar added.