Budget Wish List – Indian stainless steel makers
Indian Stainless Steel Development Association has recommended government to increase basic import duty on stainless steel flat products from 7.5 percent to 12.5 percent and to abolish the import duty on key raw materials like ferronickel, pure nickel, ferromoly and SS scrap to nil.
Stainless steel industry has been facing extreme difficulty in the last few years. The Indian stainless steel industry has made an investment of approximately Rs 35, 000 crore by both public and private sector towards capacity expansion and modernization. Most of the capacities which were added in the last 4-5 years were based on healthy estimates of demand growth. But this investment is under serious threat.
One of the main reasons for this is huge import surge, especially from China, which has primarily contributed to the deteriorating condition of the SS industry. Imports of stainless steel flat products rose from 3, 24,460 MT in 2013-14 to the highest ever record of 5, 32,033 MT in 2015-16. Imports from China have more than doubled from 1, 11,765 MT in 2013-14 to 2, 76,456 MT in 2015-16, according to Ministry of Commerce. China now accounts for more than 50 percent of the import basket. This is the single largest threat for the industry today. This trend of surging imports continues even this financial year. The situation has reached alarming proportions and has further deteriorated in the first five months of the FY 2016-17 (April – Aug 2016). The total imports of stainless steel flat products touched all time high of monthly volume of 73,749 MT in Aug 2016.
Even in comparison to other steel products, SS flat products attract the lowest basic customs duty at 7.5 percent while the duty on carbon steel products is 12.5 percent (due to two instalments of duty increase in 2015 of 2.5 percent each). Further, when there was a sharp rise in imports in the steel industry, imposition of a Minimum Import Price (MIP) was notified in February 2016 to help the domestic steel industry. The stainless steel products were left out once again thus depriving the domestic stainless steel industry from any protection even if it was meant to be in the short term.
Considering the fact that today imports occupy 25 percent market share, there is an immediate need for increasing the import duty on stainless steel flat products.
Source : Business Standard