Agencies
New Delhi
The Govt will soon impose a 20 percent import tax on some hot-rolled steel products for 200 days, two sources said on Monday, as the government investigates a threat to domestic companies from rising supplies from China, Japan, South Korea and Russia.
The products together accounted for more than half of the 5.5 million tonnes (MT) of steel imported last fiscal year into India, the world's only major growing market at a time when top consumer and seller China is slowing.
Struggling to compete due to higher borrowing and raw material costs, Indian steel companies had successfully lobbied to get duties on some products raised to 12.5 percent and quality checks strengthened in recent months.
But the duties did not apply to Japan and South Korea, countries with which India has free trade agreements, prompting the companies to seek a safeguard duty that applies to all.
An Indian steel company executive, who declined to be named, said the so-called safeguard duty would not completely halt imports of the products but prevent foreign suppliers from "predatory pricing" when local production is rising.
Acting on a complaint from Steel Authority of India (SAIL), JSW Steel and Essar Steel, the Directorate General of Safeguards said last week any delay in implementing the duty would cause such damage to the local industry that would be "difficult to repair". (bit.ly/1Oa7c7e)
The government has accepted its recommendation and a notification on a temporary duty for hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more would come out soon, said the sources aware of the matter but who are not authorised to talk to the media.
News agency NewsRise quoted two senior Finance Ministry officials to say a duty may be announced as early as Monday.
Reports of the duty pushed up shares of SAIL, JSW, Tata Steel, Jindal Steel and Power and Bhushan Steel.
Imports made up 5 percent of the country's total production of the under-investigation steel products in the year to end-March 31, 2014. But they have increased since then and are on course to hit 13 percent this fiscal year, or 3.4 million tonnes, according to the companies that sought the duty.
