A global demand slowdown that has resulted in capacity build up in major steel producing countries such as China, Japan and South Korea, pushing them to adopt predatory pricing strategies and dumping their products in India, has eroded the profitability of domestic industry, the steel and mines minister said.
Narendra Singh Tomar said in a statement in parliament that the Indian steel industry was passing through a severe downturn, as he listed a series of steps that had been taken since last year to provide cushion to domestic steelmakers who have had to reduce their prices in the face of cheap imports.
To reduce stress in the steeel sector, he said, the Reserve Bank of India had extended the 5:25 scheme in July last year, allowing longer amortisation period for loans and periodic refinancing to projects in infrastructure and core industries sectors.
The minister said the government had taken steps to increase availability of coal and iron ore for the steel industry and raised customs duties o both flat and non-flat steel to 15 percent from 10. Import duties on ingots and billets, alloy steel and long products were also raised to protect domestic steelmakers.
Last year, India also imposed anti-dumping duty for five years on imports of certain steel products from China, South Korea and Malaysia, while it introduced safeguard duty of 20 percent this year on some other products.
The big step came in February when the government introduced a minimum import price on 173 steel products.
Financial performance of selected steel producers in the country during the last two financial years is given below:-
(Rs in crores)
|Name of Steel Producer||2014-15||2015-16|
|Full Year||Quarter 1||Quarter 2||Quarter 3|