Discussions over imposing additional safeguard duties on steel imports are at an advanced stage at India's Directorate General of Trade Remedies (DGTR), the government body in charge of recommending safeguard duties.
Deliberations started a few months ago following a complaint by the Indian Steel Association (ISA), which represents the country's six large integrated steelmakers.
The ISA and secondary steel producers have submitted all information requested by the DGTR in this case, according to the steel ministry.
Talk of impending safeguard duties have put off overseas sellers from offering cargoes into the Indian market and encouraged domestic mills to hold on to their offer prices, despite a sharp decline in downstream demand.
Steel-consuming sectors such as engineering and automobile are opposed to any additional duties for steel imports as these will lift their cost of production amid a slowing economy.
Indian steelmakers are pushing for a 25pc safeguard duty on steel imports along the lines of the Section 232 tariff imposed by the US last year.
Domestic producers are concerned about higher inflows of flat steel from Japan and South Korea, which have free-trade agreements (FTAs) with India and are exempt from basic customs duties on steel products. Shipments of finished steel from FTA countries such as South Korea, Japan and Indonesia contributed to around 54pc of India's total finished steel imports of 7.72mn t in July 2019, according to the steel ministry.
Domestic steel demand in India has been hit by a broader economic slowdown, particularly in the real estate and automobile sectors — key drivers of steel consumption growth. Demand has also been slower from the infrastructure industry, the biggest steel consuming sector, as the country's liquidity crunch holds up projects.
