IGI Logo

 India is weighing imposition of a "safeguard duty", or a temporary tax, on steel, the steel minister, H.D. Kumaraswamy, said on Thursday, as it attempts to rein in a flood of cheap imports from China.

The world's second-biggest producer of crude steel, India became a net importer of the alloy in the fiscal year to March 31, with imports surging to a seven-year high during the first seven months of the current financial year.

The ministry has sought imposition of 25% safeguard duty or a temporary tax for two years on flat-steel products to curb cheap Chinese imports, Reuters reported last week.

"The process for considering safeguard duty is on," Kumaraswamy said on the sidelines of an event in New Delhi, the capital.

Finished steel imports from China reached an all-time high during the period from April to October, and the steel ministry warned the trade ministry last month against "a looming threat" of a huge increase in cheap imports from the giant neighbour.

The flood of cheap Chinese steel has pushed India's smaller mills to scale down operations and consider job cuts, as the South Asian nation joins a growing list of countries contemplating action to stem imports.

However, demand has been strong, with consumption of finished steel reaching a seven-year high during the period from April to October.