India's Ministry of Steel has communicated to its counterparts in the Ministry of Commerce, seeking an ‘immediate and urgent' review of the comprehensive economic partnership agreements (CEPA) with Japan and South Korea which seek to eliminate import duties on steel shipped from these countries, a senior Indian government official said on Friday, December 30.
The official said that under CEPA import duty on steel shipments from Japan has already been reduced to nil and the same will be done for steel shipments from South Korea and these moves under CEPA will adversely impact domestic steel mills, already "distressed from inflow of cheap steel imports".
The Ministry of Steel's initiative to get the Ministry of Commerce to review CEPA has followed close on the heels of a parliamentary committee expressing concern over the impact of "zero rated" steel imports from Japan and South Korea on domestic steel mills, at a time when domestic input costs are on the rise and these local steel mills are ill-equipped to face cheaper imports, the official added.
India concluded CEPA with Japan in 2010 and a similar agreement with South Korea was signed in 2011.
It was pointed out by the Ministry of Steel that at the time of signing of CEPA the share of steel imports from Japan and Korea as a percentage of total Indian imports of steel ranged around 23 percent, which had risen to levels of 47 percent in 2015-16.