Maharashtra Association opposes 20% safeguard duty on hot-rolled steel imports

The Federation of Associations of Maharashtra (FAM) has opposed the 20% safe guard duty on hot-rolled steel imports, saying the move will kill small and medium steel businesses, and also threatened to take legal measures.

Stating that domestic steel producers don't need any safeguarding, the FAM said domestic steel makers have been selling steel to domestic consumers at about 20% higher even though international prices are low helping them get strong margins to pay service their debt. Therefore, the safeguard duty is unjustified and intolerant.

Already associations like TSSIA, COSIA, SWMAI, and BIMA have opposed the anti-dumping duty imposed by government last week to control dumping by China, for next 200 days.

"Only recently the government increased basic customs duty twice by 2.5% each making effective rate 12.5% from 7.5% and with the 20% safeguard duty, total effective duty is 52%," FAM president Mohan Gurnani said in a statement.

He also trashed steel majors' claim that they have been losing heavily due to steep fall in steel prices globally, saying raw materials such as iron ore and coal prices have also fell steeply, besides lower production cost.

He also said the government move will only help kill the small and medium steel businesses apart from fleecing end consumers and threatened to take legal recourse to protect their interest.

The domestic steel companies are sitting on debt burden of Rs 3 trillion and falling prices have led to steeply lower realisation making them difficult to service this huge debt burden.