GS-III: Registration of steel and iron imports.

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In a bid to clamp down on the dumping of iron and steel imports and also the over and under-invoicing of these products the government has removed these items from the ; free category and has made it mandatory for importers to apply in advance for registration of their import.

Import and Export of Iron & Steel

• Although India started exporting steel way back in 1964, exports were not regulated and depended largely on domestic surpluses. However, in the years following economic liberalisation, the export of steel recorded a quantum jump.
• Subsequently, the rapid growth of domestic steel demand has led to a decline in the rate of growth of steel exports from India to ensure that domestic requirements are adequately met. India is currently a net importer of total finished steel.
• Iron & steel are freely importable and freely exportable.

Steel Prices:

Price regulation of iron & steel was abolished on January 16, 1992. Since then steel prices are determined by the interplay of market forces.

Domestic steel prices are influenced by trends in raw material prices, demand-supply, conditions in the market, and international price trends among others.

As a facilitator, the Government monitors the steel market conditions and adopts fiscal and other policy measures based on its assessment. Currently, GST of 18% is applicable on steel and there is no export duty on steel items.

A Steel Price Monitoring Committee has been constituted by the Government with the aim to monitor price rationalization, analyze price fluctuations and advise all concerned regarding any irrational price behaviour of steel commodities.

To avoid any distortion in prices in view of ad-hoc and rising imports, the Government had taken several steps including raising import duty and imposing a gamut of measures including anti-dumping and safeguard duties on a host of applicable iron and steel items.

Problems of Iron and Steel Industry:

• Poor demand, price slump, competition from cheaper imports and delays in project execution are major problems in Indian steel industry.
• Inadequate supply of power and coal, Inefficiency of public sector units and under-utilisation of capacity are other challenging issues.
• Indian banks are grappling with bad loans (NPA) and at the same time the industry which has a long gestation period, needed huge investment.
• Raw material and infrastructure bottleneck issues are also there.
• Obsolete technology in PSUs led to inferior quality products.

Way Forward

The Indian steel industry has entered into a new development stage, post de-regulation, riding high on the resurgent economy and rising demand for steel.

Huge scope for growth is offered by India’s comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.

The New Industrial Policy Regime provides opportunities for the growth of Iron and Steel in the private sector.

The Government has also announced a policy for providing preference to domestically manufactured Iron & Steel products in Government procurement.