NEW DELHI: A spat has broken out between the steel and commerce ministries over duties slapped on imported steel. The steel ministry favours raising the basic customs duty to protect Indian steel-makers from possible dumping by Chinese steel giants who have been locked out of the US in a tariff war that has erupted between the two economic giants.
However, the commerce ministry, which wants to protect the interests of the engineering industry and auto parts manufacturers, wants imported steel to be taxed at current rates as these user industries have complained that Indian steel-makers have raised prices, making them uncompetitive globally. To try and settle the row, the commerce ministry has set up a committee to look into the issue of pricing and report back to it.
Officials said the steel ministry favours raising the basic customs duty on certain steel products from the current 10-12.5 per cent to 20 per cent. “We are looking at certain varieties of hot-rolled and cold-rolled steel, besides certain wire rods and other products,” said officials.
India, the world’s second-largest steel producer, turned net importer in the year ended March 31, 2019 after three years and this has raised eyebrows in the industry and in Government. However, engineering firms and auto-parts manufacturers say that Indian steel-makers need to be globally competitive rather than force them to buy Indian and raise costs.
In a pre-budget memo to the government, the Automotive Component Manufacturers Association of India said, “A reduction in customs duty on all alloy steel and secondary aluminium alloy items, including scrap, is strongly recommended.”While India’s engineering exports fetch about $80 billion annually, auto components bring home some $13.5 billion. The commerce ministry is anxious that this ‘golden goose’ should not be disturbed.