Indian steel buyers and consumers have appealed to prime minister Narendra Modi not to impose any additional import duties on steel products as it may lift domestic steel prices further.
There is market talk that India is preparing to impose additional safeguard duties on some steel products soon in response to calls from large integrated mills, which claim that such imports are pressuring prices and eating into their profit margins. These mills earlier this year submitted an application to the directorate-general of trade remedies for the imposition of a 25pc safeguard duty on steel imports, along the lines of the US Section 232 tariff imposed on steel imports last year.
Delhi has made steel manufacturing a key part of its Make in India campaign, targeting to triple steel output to 300mn t by 2030-31.
An oral hearing has been scheduled for an anti-dumping investigation into aluminum and zinc-coated flat steel imports from Vietnam, China and South Korea on 30 July. Anti-dumping investigations into imports of some stainless steel products are ongoing.
The Steel Users Federation of India, Steel Chamber of India, Chamber of Association of Maharastra Industry and Trade, Fasteners Association of India, Chamber of Small Industry Association and Thane Small Scale Industries Association have all appealed against the additional import duties.
India currently imposes an import duty of 10pc on long steel products and 12pc on flat steel products. The country also imposes anti-dumping duties on many other steel products, including hot-rolled coil, cold-rolled coil, rebar, wire rod and certain stainless steel grades.
There has been no surge in steel imports, which may affect domestic mills, with imports at around 6pc of total domestic output, the associations said.
Indian steelmakers' profits have been growing over the last three years, while imports have considerably declined during this period, and the small volume of imports is unlikely to dent their profitability, said the joint appeal to the prime minister.
Steel consumers are upset about paying much higher prices in the domestic market compared with prevailing international rates. Argus assessed the Indian HRC domestic ex-mill price on 12 July at 38,500 rupees/t ($577/t), while Indian mills sold cargoes at $512-515 cfr/t Vietnam recently.
They are also concerned that additional safeguard duties may disrupt exports of equipment that uses certain steel quality and grades that are currently not available in India. Small merchants may have to shut down their units as a result.
Moves to impose additional import duties could also provoke tit-for-tat action from major steel exporters to India, such as Japan and South Korea.
India's total steel output was up by 3.4pc on the year to 27.72mn t in April-June, while imports during the quarter fell by 9pc to 1.72mn t.