The current woes of the Indian Steel industry, which is reeling under profitability and margin pressure, cannot be attributed to cheaper imports from Free Trade Agreement (FTA) partners such as South Korea, Japan and Malaysia, Commerce Minister Nirmala Sitharaman said in response to a parliament question.
“The total value of imports of industrial grade stainless steel from Free Trade Agreement partners such as Japan and South Korea over the last three years have shown a negative growth rate,” she said in a written reply in Lok Sabha on Friday.
The Minister also said that FTA utilisation rate with Malaysia was less than 10 per cent. “Hence one cannot attribute any sufferings of this sector (steel) to Free Trade Agreements,” she added in her reply.
According to data from Joint Plant Committee, under the Ministry of Steel, India’s finished steel imports grew 53.1 per cent to 2.545 million tonnes in the first quarter of fiscal 2015-16 from last year. Steel imports had jumped 70 per cent to over 9 million in tonnes in fiscal 2015, with China accounting for a third of the imports. Imports rose 55 per cent in April-May 2015-16 period.
The imported steel are priced up to 20 per cent lower than the Indian price, causing a major headwind for domestic players like JSW Steel, Tata Steel among others. Steel imports mainly from China along with that of FTA partners was sighted as the reason for the current turmoil of the domestic industry.
According to India Ratings and Research, iron and steel imports rose the most among the top 10 imports from China.
In June, India increased duty on certain steel products by 2.5 per cent and also imposed anti-dumping duties ranging from $180-316 per tonne on certain industrial grade stainless steel and has indicated more steps like tightening quality control to protect the domestic industry.