India’s Ministry of Steel currently has no immediate plans to propose higher taxes on imported steel, despite the country turning into a net importer of the alloy due to increased shipments from overseas, especially China, according to a senior government source.
Top steel producers in India have urged the government to impose higher taxes on steel imports to curb the influx of overseas supplies into the world’s second-largest crude steel producer.
However, the Ministry of Steel has not submitted a proposal for increased taxes to the finance ministry at this stage, citing robust domestic demand as the reason, stated the source, who has direct knowledge of the matter.
Steel mills are advocating for authorities to raise taxes from the existing 7.5% on various steel products to discourage imports, the source mentioned, requesting anonymity as discussions are not public.
India’s finished steel consumption reached a five-year high of 87.1 million metric tons during the first eight months of the current financial year starting April 2023, marking a 14.9% YoY increase.
The government will closely monitor import volumes, the source emphasized.
Steel imports from China surged to a five-year high between April and November, making China the leading exporter of finished steel to India during this period, selling 1.3 million metric tons, up 48.2% from the previous year.
In a separate development, the government is actively working on establishing a consortium of state-owned companies to import coking coal, a crucial raw material for steelmaking. This move aims to assist mills in negotiating better pricing, as certain producers of coking coal lack transparency in pricing, noted the source.
Additionally, the government plans to resume talks with landlocked Mongolia to diversify India’s sources of coking coal imports. This initiative is part of broader efforts to mitigate shortages and strengthen the resilience of India’s steel industry.