India plans to increase excise duties on steel imports to 20%

India is considering imposing a 20 percent anti-dumping duty on imported steel. This after domestic producers complained that they were affected by a wave of cheap imports – mainly from China and Russia.

The proposal was stimulated by a complaint filed in July by three of the largest steel companies in India: Steel Authority of India, Essar Steel and JSW Steel. Who dispute between them more than half of the total production of hot rolled steel in India.

Analysts suggested these companies, along with colleagues. Like Tata Steel, they benefit from a tariff setting, which would allow them to increase volumes and prices.

The recommendation will be sent to a protection committee before the Ministry of Finance makes a final decision. India has already raised taxes on imported steel from 10 percent to 12.5 percent last month.

In June, New Delhi also imposed anti-dumping duties on stainless steel products from China, Malaysia and South Korea.

The prices of hot-rolled products have fallen by almost 20 percent in India. Due to an increase in imports from China, Russia and Ukraine according to Bank of America.

Steel producers need protection for imported steel

Indian steelmakers have complained that market prices are now below production costs, and have called for greater protection against cheap imports, including the imposition of anti-dumping duties.

Steel imports in India increased by 58 percent in the first four months of this financial year. Compared to the same period last year.

While domestic prices have already risen slightly in anticipation of anti-dumping duties, analysts have warned that an increase is by no means assured.

In 2009 – when Indian steel producers faced similar pressures – the Directorate General of Guarantees similarly recommended the imposition of anti-dumping duties. But the government in New Delhi took a step back. „History suggests it is not a mere formality,” said Macquarie Investment Bank.

India is the latest country to grapple with an onslaught of cheap steel from China. Both the US and Europe have recently imposed anti-dumping duties to try to protect their domestic industries.

The problems of steel producers in India will have repercussions for the entire economy. Especially on the country’s banking system. Which lent almost $60 billion to the steel sector.

Article source: http://www.ft.com/intl/cms/s/0/7c66de80-5798-11e5-97e9-7f0bf5e7177b.html#axzz3lhEFnboC