According to Steel Secretary Sandeep Poundrik, India’s per capita steel consumption is currently at 104 kg, which is at a crossroads. He expects consumption to pick up dramatically in the years ahead based on a stabilizing population and a growing GDP.
On the subject of steel imports, Poundrik said the government still has not determined whether the 12 percent provisional safeguard duty will be revised. It will depend on the recommendations of the Directorate General of Trade Remedies (DGTR), which is expected to complete its investigation in August. The safeguard duty is for 200 days.
Poundrik also clarified that there have been several cases of misuse of licenses, in which legal action is underway. He said the government has utilized various tools, such as a provisional duty, an increase in monitoring and regulation, and is seeing early signs of success with steel imports declining in April and May. If this trend continues, imports for the year will decline by almost 50 percent when compared to the previous year.
Also read: 2 Stocks to buy now for an upside of up to 41%; Are you holding it?
India has imposed a 12 percent provisional safeguard duty for 200 days on five steel product categories, including hot/cold rolled coils and coated sheets, to stop the flooding of cheap imports from countries such as China, Japan, and South Korea.
Denoting a substantial growth in imports from 2.29 MT in FY22 to 6.61 MT in FY24, the 12 percent provisional safeguard tax was instituted to preserve domestic producers. The duty will only apply to imports if they fall below $675–$964/tonne.
While larger steelmakers endorse the decision made by the government, micro, small, and medium enterprises (MSMEs) exporters are strictly opposed to it, citing rising input costs that threaten their profit margins and reduced global competitiveness.
Since 12 April, NIFTY Metal has surged over 13 percent as steel companies such as Tata Steel, JSW Steel, Hindalco Industries, etc, can now tap into the growing domestic market and avoid any cheap imports that directly affects its business.
Writted by Satyajeet Mukherjee
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
