FIMI Alleges Windfall Profits by Indian Steel Mills

PTI reported that Indian Miners body Federation of Indian Mineral Industries has urged the government to revisit its protectionist approach towards
FIMI Alleges Windfall Profits by Indian Steel Mills
FIMIFIMI

PTI reported that Indian Miners body Federation of Indian Mineral Industries has urged the government to revisit its protectionist approach towards indigenous steel manufacturers and said that domestic players are taking undue advantage by fixing steel prices almost at par with the international level despite all the protection and incentives. Federation of Indian Mineral Industries Secretary General Mr RK Sharma in a letter to Principal Secretary to the Prime Minister Mr PK Mishra wrote “In order to take undue advantage and profiteering, the integrated steel companies fix up the steel prices almost at par with the international steel prices despite all the protection and incentives provided to steel industry backed up with secured iron ore and other raw material supply. This Federation would therefore request the Government of India to withdraw import duty of 15% and other undue protective support provided to Indian steel industry. The Indian steel industry is well protected from international competition because of the 15% import duty on steel as per Indian Customs Tariff, in addition to other protectionist measures, including minimum import price, antidumping and countervailing duties, Steel Import Monitoring System, preference to domestically manufactured steel products in government procurement among others.”

The letter said “Any firming up of steel demand propels the steel companies to raise price of steel unabatedly. Since COVID19, the steel industry has been raising prices of steel very frequently. During the last two months itself, the prices of steel have increased six times which is unprecedented. While working out the price of steel, the Indian steel industry takes international price as base whereas it gets high grade iron ore at comparatively much lower prices, either from domestic sources or captive mines. At present, almost all the primary steel producers have captive iron ore mines where iron ore is available to them at transfer prices. Some of the primary producers of steel are exporting and selling iron ore in the open market. The consumption of high grade iron ore at lower than the international price, coupled with cheaper labour costs should give more and better quality steel at a competitive price. The domestic steel industry hides these vital information and reaps windfall profits.”

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