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Govt to lift restrictions on steel imports

Swati Prasad & Sidhartha

The government has decided to review the non-tariff barriers imposed on the import of steel products brought about by a Directorate General Foreign Trade notification dated November 24, 2000.

According to commerce ministry sources, restrictions imposed on the import of seconds and defective steel is "badly hitting" the secondary steel units, comprising mainly cold roll steel manufacturers.

The government had restricted the import of seconds and defective steel allowing consignments to come in through only two ports. Besides, imports of such steel were to have a pre-shipment certificate, along with a declaration stating the use this steel would be put to.

"Several downstream steel manufacturers have met us. They say the several grades of steel that they are importing are not available in the country. And these restrictions are hitting their business," the source added.

However, the government is aware that if the restrictions are lifted, the big players in the steel industry will get annoyed since the barriers were brought into force on their behest.

In March this year, the Cold Rolled Steel Manufacturers Association of India had asked the ministry of commerce to lift the non-tariff barriers on the import of steel products.

In a letter to Murasoli Maran, minister of commerce and industry, CORSMA said that this move is hurting the downstream operations in the Indian steel industry, and thereby the entire economy since steel manufacturer have formed cartels to fix prices.

S C Mathur, executive director of CORSMA had said that the DGFT notification wants all foreign producers of steel who are exporting steel to India to get registered with the Bureau of Indian Standards and meet the quality norms specified by the body.

"The international standards of steel are far superior than the BIS standards. Since India is not such a big market for steel imports, they do not take the pains of getting registered with the BIS," Mathur had told Business Standard.

Also, Mathur feels that the DGFT notification implies a virtual ban on steel imports. "This has also curbed dynamism and retarded the technological and managerial upgradation of the steel industry for cost reduction in order to achieve global competitiveness," the letter addressed to Maran had said.

"A certain section of the steel industry has been lobbying to block imports for monopolistic pricing. The government should play a neutral role and let the prices be determined by the market forces," the letter had added.

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