The Federation of Indian Chambers of Commerce and Industry (FICCI), a leading Indian trade and industry body, has asked the Indian government to increase the customs duty on steel imports from five percent to 10 percent in the pre-budget suggestions for the country's steel industry, due to cheap imports of steel and declining consumption of local steel by domestic users.
According to the FICCI, imported steel currently accounts for over 11 percent of domestic consumption, compared to six percent a few years ago.
In its statement, the FICCI said, "India's imports of steel and allied products have almost doubled in the last four years. India imported 4.3 million mt of steel and allied products in FY 2005-06, which has gone up to 10 million mt in FY 2008-09."
"China has announced tax incentives of up to nine percent on exports of steel products. This move has concerned the Indian steel industry, as China is the largest exporter of steel to India," the FICCI added.
Given the current situation, the FICCI said, the domestic steel industry needs the early imposition of safeguard and antidumping duties on imports of steel.
The FICCI also called for the abolition of customs duty on raw materials not available indigenously.
The FICCI further argued "India is the third largest steel producer after China and Japan, with its share in global steel production going up to eight percent in the first five months of this year from around four percent in 2008. India could overtake Japan if appropriate fiscal incentives were provided to the sector."