With the possibility of imposing a minimum import price on steel fading, India’s Ministry of Steel will propose an increase in the ceiling customs duty rate on steel products in the forthcoming Union Budget 2016, a ministry official said on Wednesday, January 27.
The ministry official said that the Prime Minister’s Office warned that a minimum import price proposal will likely raise issues since it will be conveyed to the World Trade Organization (WTO) and retaliatory measures on Indian exports could not be ruled out.
Therefore, the Ministry of Steel is seeking an increase in the ceiling customs duty rate on steel imports. Although the final rate for suggestion is yet to be determined and representations from stakeholders have been sought, the ministry official said that the ceiling customs duty rate for the financial year 2016-17 could be 25 percent, up from the current 15 percent, adding that the suggested rate will still be lower than the WTO ceiling rate of 40 percent. However, the higher rate will not be applicable in case of imports from countries with which India has signed Free Trade Agreements (FTAs).
In the previous budget, the Ministry of Finance increased the ceiling rate for customs duty on steel imports to 15 percent from 10 percent.
As per data sourced from the ministry, Indian steel production during April-December 2015 was estimated at 68 million mt, down 1.4 percent compared to the corresponding period of the previous year. Steel imports during the period stood at 8.38 million mt, up 29 percent, while steel exports from the country amounted to 2.9 million mt, down 29 percent, with steel domestic consumption being estimated at 58 million mt, up four percent.