Worried over the growing import of cheap steel from Japan and South Korea, Indian steel giant JSW Steel, on Tuesday, demanded that steel be removed from the purview of the free trade agreement (FTA) with the two Asian economic powers.
“India has an FTA with Japan and South Korea. The economies of these two are not doing well, especially Japan. So, they are sort of exporting a lot of steel into India at a very low price, taking advantage of such FTAs,” JSW Steel’s Chairman and Managing Director Sajjan Jindal told reporters on the sidelines of a Assocham steel summit.
Mr. Jindal said Japan and Korea were pushing for more steel into India. There had been a 300 per cent increase in imports of steel in just one year from these countries, he said. It was time the government took a close look at the situation and did the needful by taking steel out of the purview of the FTA, he added.
India signed FTA with South Korea in January 2010, and with Japan in August last year. Under the FTA, duties on most of the products, traded between the countries, are either eliminated or reduced sharply. Duties in the related cases come to zero levels in phases. India’s steel import stood at 6.83 million tonnes in 2011-12.
According to the Joint Plant Committee of the Steel Ministry, imports went up to 2.88 million tonnes during April-July of the current fiscal from 1.88 million tonnes in the same period last year, a growth of over 53 per cent. While import duty on South Korean and Japanese steel has been reduced to 3.13 per cent from 5 per cent in 2010, imports from other countries attract 7.5 per cent duty. “Japan and Korea have got large capacities which they cannot consume domestically. They were dependent on China for exports earlier but with China having built its own huge capacity, things have changed and due to the FTA these two economies are having big advantage in India,” he added.