India's Ministry of Steel currently resists increasing taxes on imported steel despite escalating imports, primarily from China. Leading domestic steelmakers urge higher taxes to limit these imports. However, due to robust local demand, the ministry has yet to propose heightened taxes. With rising steel consumption, the government is closely monitoring imports, especially as Chinese steel shipments to India reach a five-year peak, reports Reuters.
India's Ministry of Steel is refraining from seeking elevated taxes on imported steel, attributing this to amplified overseas shipments, predominantly from China. Despite pleas from top domestic steel producers to impose higher taxes as a deterrent to inbound supplies, the ministry has not forwarded any proposal to the finance ministry at this stage. The current stance stems from robust local demand, revealed a government source privy to the matter.
The request from steel mills for tax hikes, potentially from the prevailing 7.5%, aims to curtail the influx of imported steel products. However, as discussions remain confidential, the source declined identification.
During the initial eight months of the current fiscal year starting April 2023, India's finished steel consumption soared to a five-year high of 87.1 million metric tons, marking a substantial 14.9% year-on-year surge.
The government remains vigilant, closely monitoring the volume of steel imports, particularly from China, which reached a five-year peak between April and November, as per government data. China, a significant steel exporter globally, notably ramped up finished steel exports to India during this period.
Additionally, the government is devising plans to form a consortium of state-owned enterprises to import coking coal, a critical ingredient in steel production. The objective is to negotiate better prices amidst observed opacity in coking coal pricing by producers, reported a source familiar with the matter.
The proposal for the consortium aims to mitigate shortages faced by domestic steel companies. Furthermore, the government intends to resume discussions with landlocked Mongolia to diversify coking coal imports, bolstering India's raw material sourcing strategies.
India's Ministry of Steel resists immediate tax hikes on imported steel despite escalating shipments, particularly from China. This stance arises from robust local demand and awaits further assessment. With increased domestic steel consumption, the government closely monitors imports, especially from China, which hit a five-year peak. Additionally, plans for a state-owned consortium to import coking coal aim to tackle pricing opacity and shortages faced by Indian steelmakers, signaling efforts to bolster raw material sourcing.