The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has urged the Indian government to reduce finished steel and coking coal imports in order to control India's rising current account deficit. The industry body objected to the government's decision to relax restrictions on iron ore exports, adding that any relaxation in export restrictions on iron ore will adversely impact the prospects of India's steel industry.
ASSOCHAM stated that the Indian steel industry has already been suffering from non-availability of iron ore for the last couple of years owing to suspension of mining in Karnataka and Goa by the Supreme Court of India, coupled with restrictions on undertaking mining activities in Odisha by the state government.
ASSOCHAM demanded that the Indian government should make iron ore available to Indian steel producers instead of exporting, considering the lower domestic steel production capacity utilization and the chance to help reduce steel imports mainly from Japan and South Korea who are dumping their cheap steel into India under the Foreign Trade Agreement (FTA).
According to ASSOCHAM, the current account deficit can also be controlled by reducing imports of finished steel and coking coal, as in the financial year 2012-13 India imported about eight million mt of finished steel and about 35 million mt of coking coal worth about $5 billion and $7 billion respectively.