NEW DELHI: Indian Stainless Steel Development Association (ISSDA) wrote a letter to Finance Minister, Arun Jaitley, and asked to increase 25 percent customs duty from 10 percent to save the interest of domestic firms.
“There is an urgent need to control the growing imports and one way to achieve this is by increasing the customs duty rates. However, this is not possible with a small differential between MFN rate and peak rate of duty,” ISSDA added.
An MFN tariff is the lowest possible tariff a country can assess on another country. “Therefore, it is suggested that the peak rate of duty for stainless steel products may be increased from 10 per cent to 25 per cent to enable any maneuverability in MFN rates as and when need arises,” it added.
It is, therefore, requested that in order to safeguard huge investment made towards development of Indian stainless steel industry, peak duty rates may be raised to 25 per cent from the existing 10 per cent,” ISSDA said.
India is the third largest consumer of stainless steel in the world and has 2.68 million tonnes production capacity per annum. The domestic industry is reeling under a surge in imports primarily from China and other nations.
Overall, stainless steel imports have risen from 2.39 lakh tonnes (LT) in 2011-12 to 3.24 LT in 2013-14. Imports are expected to rise to 4.23 LT by the end of this fiscal. India had pruned the peak customs duty from 12.5 per cent to 10 per cent for all goods other than agriculture products in the Union Budget of 2007-08.
“During this period, the import of stainless steel was a meager 1.44 LT against 3.24 LT in 2013-14. This surge of more than 80 per cent in import volumes has been largely due to the low levels of import duties on stainless steel flat products,” ISSDA said.