The Indian government’s decision to hike import duties in steel products to counter the devaluation of the Chinese currency has been criticized by the domestic engineering product exporting industry, an official of the Engineering Export Promotion Council (EEPC) said on Thursday, August 13.
The official stated that repeated increases in import duties on steel in reaction to the devaluation of the RMB are “ill-advised” since the competitiveness of Indian engineering valued-added steel product exports will be further eroded while Chinese exporters will continue to grab a larger market share supported by their weaker currency. Indian engineering exports have shrunk by six percent during April-June 2015, while total Indian merchandise exports have shrunk 16 percent year on year.
Offering protection to domestic steel producers by increasing steel import duty will only increase input costs of value-added steel and engineering products and render them uncompetitive in international markets where demand continues to be sluggish, the official said.
On Wednesday, August 12, the Indian government hiked import duties on select steel products by 2.5 percent following which the duty on semi ingots has been raised to 10 percent compared to 7.5 percent previously and the duty on stainless steel long products, alloy steel long products, non-alloy long products and alloy steel flat products has also been increased to 10 percent.