Curtains on steel MIP? Govt may withdraw trade barrier in Feb

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Shreya Nandi
MoneycontrolThe steel ministry may not recommend a further extension of minimum import price (MIP) on the metal beyond February as it does not see the relevance of the trade barrier now.


MIP serves as the floor rate below which overseas shipments of specified items are not allowed to enter Indian shores.


On February 5, 2016, the government had imposed an MIP on 173 steel products ranging between USD 341-752 per tonne, on 173 steel products, for a period of six months to guard the local industry against cheap Chinese imports.


This list was later pruned to 66 items in August and subsequently to 19 products in December.


MIP has now been extended on 19 steel products in the range of USD 643 and 752, till February 4.


However, top steelmakers have not proposed any initiation of anti-dumping duty on these 19 galvanised and corrugated steel sheets, as they have not been able to provide sufficient data to prove any evidence of dumping, a government official told Moneycontrol.


Other products such as hot-rolled coils, cold-rolled products, wire rods have already been covered under provisional anti-dumping duties, the official said, adding that there is no relevance of MIP any more.


The official further said that MIP may not be further extended beyond February.


The final decision would be taken by the commerce ministry, in consultation with the steel ministry before February 4.


The steel and commerce ministries’ rationale behind imposing MIP, almost a year back was to provide immediate relief to steelmakers from cheap inward shipments coming in from countries including China, South Korea, Japan, Russia and Ukraine.


The steel ministry had labeled MIP as an interim measure to protect the local industry, with domestic steel producers grappling with issues ranging from huge loan volumes and eroding bottomline owing to cheap imports.


Meanwhile, steelmakers also sought a long-term trade barrier–anti-dumping duty–on most of products, as it can be levied for up to 5 years.


The imposition of these trade barriers ultimately led to a sharp fall in inward shipments, with India importing 5.49 million tonnes of finished steel during April-December, down 37.4 percent on year. In 2015-16 (April-March), imports grew 20.2 percent on year to 11.21 million tonnes, according to steel ministry data.


Trade and commerce minister Nirmala Sitharaman on Tuesday said also said that the objective of imposing MIP on certain steel products was not to give a “permanent cover” to the industry but to stop cheap inbound shipments.


 

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