Indian needs to introduce a minimum import duty on steel products if it wants its domestic industry to grow and survive the massive fall in global prices that is making it uneconomical, the head of one of India’s leading private steel maker said.
Sajjan Jindal, chairman of JSW Steel, told CNBC in an interview that Indian manufacturers were suffering due to cheap imports from China, Japan and Korea and a safeguard duty imposed by the government was not enough to mitigate a long-term impact on the domestic industry.
“I guess over the last 15 days about 7-8 percent prices have gone up, which is not bad, but these prices are very low and unless we in India do something about stemming this imports from China, Japan, Korea, the steel industry in India will die and that will have a huge long-term impact on Indian steel industry,” he said.
Jindal blamed China for the mess, saying the huge capacity buildup in that country since 2000 had created problems for the global steel industry.
“China was growing very rapidly and since 2000 they were building 100 million tonnes of new steel capacity every year and that created huge overcapacity in China and with China slowing down, like last year they degrew 3.5 percent in steel consumption, so their export picked up in a big time which killed the whole steel industry globally,” he said.
Jindal said the industry was asking the government to take into consideration the Indian steel industry’s cost of production of between $400-420 per tonne and provide a price protection accordingly.
“Today the import is about USD 300 per tonne, so we are quite far, about 30 percent away,” he said, adding that the safeguard duty of 20 percent on steel imports wasn’t working because it was being circumvented.
He said a minimum duty of $400-450 depending on the product would work well for the industry.