Except giving a thrust to infrastructure sector, the General Budget has not spelt out any policy to restrict import of steel from China.
Dumping of cheap steel from China had been giving sleepless nights to all the major steel producers making inventory management a big challenge.
Steel consumption had come down in China even as it had increased its capacity by 80 million tonne. All over the world, it is said there was an excess capacity of 300 million tonne creating a glut. Structural imbalance is expected to drag down international prices further.
Due to low interest rate, cost competitive energy and cheap raw material and export subsidy Chinese steel turns out to be lesser by Rs.6,000 to Rs.7,000 than the steel made in India.
Major steel producers such as SAIL and RINL had expected that the import duty on steel would be raised so as to safeguard the interests of domestic manufacturers. RINL is on verge of completing 6.3 million tonne expansion at a cost of Rs.12,500 crore.
On the whole, the steel manufacturers including SAIL welcomed increased emphasis to infrastructure sector and reduction in corporate tax from 30 to 25 per cent.
“We did expect an increase in import duty for generic steel such as, billets required for construction industry,” Director of Sarda Metals & Alloys Ltd Neeraj Sarda told The Hindu .
RINL has hit hard due to shrinking profit margins and raw material insecurity. It spends highest amount on sourcing raw material among major steel producers.
“It’s quite disappointing as there is no rise in import duty and no curbs on dumping by China though sops for automobile industry and investments in infrastructure and road connectivity are good signs,” said Steel Executives’ Association joint secretary K.S. Chandra Rao.
“We are thoroughly disappointed at failure to raise import duty on steel to protect our interest,” Visakha Steel Employees’ Congress deputy general secretary Neerukonda Ramachandra Rao said.
We did expect an increase in import duty to safeguard the interests of domestic manufacturers
Neeraj Sarda
Director of Sarda Metals & Alloys Ltd
