India’s federal Ministry of Steel has no immediate plans to seek higher taxes on imported steel even though the country has become a net importer of the alloy due to rising shipments from overseas, particularly China, a senior government source said.
India’s top steel producers have asked the government to impose higher taxes on imports to curb overseas supplies coming into the world’s second-biggest crude steel producer.
However, the steel ministry has not sent a proposal for the imposition of higher taxes to the finance ministry at this stage due to brisk domestic demand, the source, who has direct knowledge of the matter, said. Steel mills want authorities to raise taxes from the prevailing 7.5% on several steel products to curb imports, the source said, declining to be identified as discussions are not public.
The federal Ministry of Steel did not immediately reply to an email seeking comment.
India’s finished steel consumption hit a five-year high of 87.1 million metric tons during the first eight months of the current financial year that began in April 2023, up 14.9% year-on-year. The government would keep a close watch on import volumes, the source said. Steel imports from China touched a five-year high between April and November, according to the latest government data.
China, the world’s top crude steel producer, emerged as the biggest exporter of finished steel to India between April and November by selling 1.3 million metric tons, up 48.2% from the same period a year earlier. Separately, the government is working on a plan to set up a consortium of state-owned companies to import coking coal, a key steelmaking raw material, to help mills negotiate better pricing, the source said.
“In many cases, we found the producers of coking coal are not transparent when it comes to prices,” the source said.
Reuters last week reported that the proposed consortium was aimed at helping domestic steel companies tide over shortages. The government would also resume talks with landlocked Mongolia as part of efforts to diversify India’s coking coal imports, the source said.
