In order to curb imports of steel from China and to cope with global overcapacity, the Indian Ministry of Steel recently proposed to increase the import tariff on steel products from 7.5- 12.5% to 15%.
The Indian Ministry of Steel has proposed to raise import tariffs as part of the Treasury’s proposed national budget for the 2019-20 fiscal year. The budget will be available on July 5.
“Because of the Sino-US trade war, China’s steel exports are seeking alternative markets, which poses a threat to the Indian market,” the Indian Steel Ministry said.
The ministry said that domestic steel mills in India are vulnerable to foreign markets, and the steel industry needs to limit “important steel imports under unfair trade”.
“The highest tax rate for all steel products may be raised to 25% to cope with all the unexpected conditions caused by the potential global market turmoil,” the Steel Department said.
The Indian Steel Ministry said that steel price volatility has made existing anti-dumping and countervailing duties ineffective.
The ministry said that if new import tariffs are implemented, it will increase the income of the Indian government by 13.66 billion rupees (1.35 billion yuan). However, whether or not to implement it still requires the Indian Ministry of Finance to make a final decision.
Due to increased local demand in India and increased imports from Japan, South Korea, and China, India was transformed from a net exporter of steel to a net importer in the fiscal year 2018-19.
Japan, South Korea, and ASEAN member states have signed free trade agreements with India. 58% of India’s steel imports come from these countries, while imports from China account for 18%.
Earlier reports said that with the increasingly fierce trade war between China and the United States, the Indian government is worried that China’s steel will flood into the Indian market.
According to Indian government data, in 2018, India imported more than 50% of wire and bar imports from China.
India’s four major steel producers JSW steel, Tata Steel, SAIL and Jindal Steel & Power account for 45% of India’s total steel production. These companies say that in the past few months, a large amount of imported steel has flooded the market, posing a threat to local steel companies.
The Indian Ministry of Steel also seeks to reduce import tariffs on coking coal, scrap and graphite electrodes to reduce the cost of steelmaking raw materials.