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India's Ministry of Commerce plans to block the import of cheap steel

22 March 2016

Indian media reported about the intention of the Ministry of Commerce finally stop imports of cheap steel. Now we consider the possibility of overlap of the last loopholes, allowing the penetration of such products. Another 5 February the Indian government minimum price of imported goods was introduced. Under it got 173 categories semis and rolled products. It takes into account products, which accounted for about 80% of India’s steel imports. This measure implied the loss of competitiveness of imported products in the domestic market. However, some vendors manage to bypass the restrictions. According to the Ministry so loophole provides an extension permanently revolving credit lines. They are provided under a uniform supply of steel products imported batches.

In order to prevent such practices by the Ministry of Commerce is considered a new project. It involves the introduction of additional fees. The size will be the difference between the minimum import price and the real price of the sale of foreign goods. It is assumed that such a move would almost completely restrict the flow of imports. However, it is doubtful that this decision will be taken. However, the proposal itself indicates the serious intention of the Government to protect the domestic market.

Indian steelmakers continue to talk about the serious problems of the metallurgical industry. They are based on high-debt, low cost rental. Negative influence a lot of raw material costs and high energy costs. Taken into account and the low demand for steel products, does not correspond to previous assumptions. Ministry of Commerce supports the position of the steel mills. In the case of the fall of the leading manufacturers of the subsequent recovery of the sector will experience considerable difficulties.

National analysts say increasing the intrinsic value of the rental. Last month showed price increase by 40 USD / ton on average. The government says the complete control of the situation. According to the authorities, the explosive rise in price of steel is not expected. However, despite these assurances consumers very unhappy with protective measures. Manufacturers pipe, automobile and other sectors suggests the increased costs of metals. The increase amounted to 10.6%. As a result, there is a decline of competitiveness on a global scale.

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