The imposition of the proposed 25 percent safeguard duty on steel imports will increase prices of goods in the domestic market and make exports uncompetitive in global markets, India’s Engineering Export Promotion Council (EEPC) cautioned in a statement on Thursday, December 5.
While safeguard duty can be imposed in ‘emergency situations’, the government proposal for such a duty now is not justified and will push up domestic steel prices by 20-25 percent, as the domestic price is linked to the landed price of imports, EEPC chairman Pankaj Chadha said in the statement.
Mr. Chadha said that, due to freight and port handling charges, imports from ASEAN countries are suffering a 12.5 percent price disadvantage, which goes up to 20 percent in the case of Chinese steel as it also faces import duty. He said that bulk of the imports are from Japan, which is seen as a high-cost producer.
“Our steel companies say that they are the cheapest. Their balance sheets are also strong. The proposal has been made without consulting the user industry, which will be hard," Chadha said.
He said that if action has to be taken it must be on specific products and that government projects will be among the worst hit as the government is the largest buyer of steel for its ambitious infrastructure programme.