Time to Open the Floodgates Again

What a difference a couple of years can make! India's steel exports surged nearly 53 per cent in the first nine months of this fiscal to 7.6 million tonnes. This followed a 102 per cent jump in 2016/17. Back in 2014, when China was dumping steel, India was struggling to cope with overcapacity. But a slew of measures, including the imposition of safeguards, anti-dumping duties and minimum import prices, resulted in restricting imports. India has been a net exporter since 2016/17. The decline in imports, however, led to a gradual rise in domestic steel prices, bolstering the profitability of steel mills. This, in turn, increased costs for user industries such as engineering goods and automobile companies. It is said steel companies are charging domestic firms 20-25 per cent higher than export prices. With the threat of China receding, it is, perhaps, time for the government to start looking at cutting back on import restrictions.

Sumant Banerji