IN order to stop cheap imported steel from flooding the market, the central government has decided to announce a Minimum Import Price (MIP) for steel. Union minister for heavy industries Anant Geete said the formal announcement of the MIP would be made early next week by the ministry of commerce.
Geete who was speaking at the inauguration of the Industrial Mantenaince Expo 2015, in Pune on Saturday said imported steel from China, Ukraine and Korea have posed a grave threat to the Indian Steel Industry. “These countries have been dumping steel in India. The price of the steel is almost 30-40 per cent lower than Indian steel,” he said. At some instances, the price of the imported finished product Geete said was lower than the raw material price.
The MIP, the minister pointed out would help in stopping the “dumping” of steel in India. Although the government had increased the import duty, he said the desired effect was not felt in the market. Imports have been steadily increasing while exports have been falling. During the last financial year the country had imported 9.32 million tonnes of steel while it had exported 5.59 million tonnes of steel. Industry sources stated that China has been increasing its steel manufacturing capacity which has resulted in an excess of 300 tonnes of steel and the slowdown in the last two years has increased its exports to the rest of the world.
Geete said that although, rise in MIP would have a positive effect on the Indian steel industry, it might have a reverse effect on alloy steel users. “Almost 100 per cent of alloy steel used in the country is imported so it might result in increase of its price. This can also have a cascading effect on the end user also,”he said. Asking for 100 per cent utilisation of capacity in the steel plants, he said it would help economise industry.