Steelmakers meet ministry, debate on import heats up

Primary and secondary steelmakers, on Friday, met with the Union steel ministry, debating whether steel imports should be banned or not.

This is one of the rare occasions when the steel ministry called both, primary and secondary, steelmakers to sit across the table and put forth their views.

Primary steelmakers such as Tata Steel, SAIL, JSW Steel among others are the ones making basic steel, which is then processed for further use. Secondary steelmakers, on the other hand, buy the primary steel and process it further before selling.

The meeting, however, remained inconclusive as the steel secretary Atul Chaturvedi wanted to hear both sides out.

The primary steelmakers, for a long time, have been asking for a curb on imports, as the imported steel is available in the market at cheaper rates and the domestic players find themselves unable to compete at those prices. Mostly, steel from China is seen entering Indian shores.

Currently, India has a 5% flat import duty on all types of imported steel and the primary steelmakers are of the opinion that the duty be raised, as imported steel is still cheaper by at least 10% against what the domestic makers sell.

The secondary steelmakers, more or less supply to the ever-growing auto sector in India and the auto sector, itself, imports steel to make their products. They vehemently oppose any kind of duty or curbs on imports and argue that a fair level playing field should be made available to them.

A Delhi-based auto grade steel maker told DNA, “Why should we not be allowed to source our raw material from the cheapest available source? For the concern of the domestic steelmakers the government wants to curb imports, but on the other hand take the US head on regarding issues of outsourcing of work to India. Aren’t these double standards?”

An official from a leading Mumbai-based primary steelmaker said, “China, a major country dumping steel in India, is selling it at below manufacturing cost, or at barely surviving price. We can’t match that and the government should take note of the domestic sector rather than support cheap imports. It is hurting the domestic market badly.”

An official from the steel ministry, however, said that the ministry is seen tilting towards the primary steelmakers more and might announce more curbs by way of a higher import duty.

The official said, “Given the stance of the steel minister Virbhadra Singh over the past few weeks on the iron ore exports and steel imports, I am sure he will lend his ear to the primary steelmakers and not to the secondary ones.”

As the situation remains today, India is seeing a surge in steel imports from China at cheaper rates and ports in Mumbai and regions nearby are flush with huge quantities of steel. However, the question remains to be seen which lobby will win the battle, the primary steelmakers which is finding it difficult to match imported steel price or the secondary steelmakers and auto sector, who find it lucrative to use cheap imported steel.