The Indian government has tightened its monitoring to reduce steel imports into the country. In his written reply in the Lok Sabha on Feb 10, steel minister Dharmendra Pradhan listed the measures India is taking to boost its domestic steel sector.
Creation of new HSN codes
The Indian government will create 1200 new categories under chapter 72 of HSN codes which pertains to imports of iron and steel. These will be introduced to minimise the products falling under the ‘others’ category, which the government said increased unnecessary imports into India.
Many importers were claiming benefits under ‘others’ category without specifying detailed specifications. The new policy will stringently look at correct specifications, according to Davis Index sources.
Steel scrap recycling policy
The country’s steel scrap recycling policy was updated to reduce dependence on imports by creating recycling hubs. To track the imports of steel a new monitoring system known as Steel Imports Monitoring System (SIMS) was also started in 2019. The policy provides advance information about steel imports to both, the government as well as relevant stakeholders.
An anti-dumping duty of 12.5pc has been levied on stainless steel. Additionally, $29 -200/mt anti-dumping duty was imposed on galvalume steel products from China in Oct 2019. The Indian government is tracking shipments from FTA counties and Indonesia to curb origin frauds. The imports of stainless steel from Indonesia grew from 8,000mt in the year ending March 2018 to 67,000mt in the year ending March 2019, a rise of over 700pc.
The percentage of increase cannot be a yearly addition in production capacity, according to Indian Stainless Steel Development Association (ISSDA). The association claimed these goods were of Chinese origin and routed through Indonesia. India had imposed customs and countervailing duty on direct import of stainless steel from China.
China, however, has signed FTA with ASEAN (which includes Indonesia). ASEAN has an FTA with India.
Quality control orders
Indian government has issued quality control orders to curb substandard steel production in India.
India has a 2.5pc basic custom duty on coking coal. The government feels a low duty rate on feedstock for steel industry, such as coking coal, ferro-scrap, iron ore and ferroalloys will help the domestic steelmakers.
Domestically Manufactured Iron and Steel Products Policy (DMI&SP)
The policy encourages consumption of domestically produced steel by government organisations. Through the establishment of Steel Research and Technology Mission of India, the government targets facilitation of research and development to meet the domestic demand for high-performance steel.