With imports set to hit a record high in the current fiscal, steel-makers today urged the government to bring the provisioned customs duty hike in the Budget into effect immediately to bail them out of the deepening crisis.
Facing a host of other problems such as higher production cost due to dearer raw materials and inflated interest rates, major producers are also left with no money to further invest, which is tantamount to government’s "Make in India" programme.
"Government should implement the enabling budgetary provision for raising the customs duty as soon as possible to give steel-makers a little elbowroom," Acharya said.
He also added that some non-tariff barriers to be put in place to safeguard against the abnormal surge in imports.
Paying heed to steel-makers’ plea, the Budget has created a possibility of raising peak import duty for steels to 15 per cent from 10 per cent now, aimed at protecting the home-grown firms from rising imports. But, it has been kept as an enabling provision for suitable imposition.
Meanwhile, imports have jumped by over 67 per cent during April-February period of current fiscal to 8.39 million tonnes (MT) while exports have declined by 11 per cent to 4.8 MT. The total imports might go to around 10 MT by March-end, he said.
"At 8.39 MT now, I think India’s steel imports will hit a record high in current year," said A S Firoz, Chief Economist, Joint Plant Committee, a unit under the Steel Ministry. India had imported 5.44 MT steel during the entire last fiscal.
"If the current international prices remain so low, then obviously there will be more imports and it will increasingly be difficult for domestic firms to do exports," Firoz added.
He said the basic reason for growing imports and dipping exports is that Indian steel-makers are unable to compete in international market due to input costs and other "external hurdles" such as infrastructure and efficient labour among others.
An official from a private sector steelmaker said even as NMDC has reduced the price for iron ore, it has to do more to make them compatible with the prevailing international price.
NMDC has cut prices of the raw material for consecutive two months, but the official described the move as "it’s too little, too late".
Apart from Tata Steel and SAIL, most Indian steel-makers do not have captive mines. Even, Tata Steel had to resort to imports for the first time in its 100-year history as iron ore was not adequately available in the country.