Indian Steel Sector Crisis Warrants Urgent Intervention

SEATTLE (Scrap Monster): A new report published by CGS CIMB Securities denotes that the steel sector in India is in deep crisis. It also called for immediate government intervention to save the troubled industry.

According to the report, even the most efficient companies in the sector are in trouble, at the current steel price levels, which have declined by nearly 30% when compared to highs recorded in 2018.

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It stated that the minimum import price (MIP) on steel is redundant. Also, the exclusion of free trade agreement (FTA) nations from the basic customs duty of 12.5% makes it quite ineffective. The MIP and FTAs need to be reviewed at the earliest, the report noted. Further, it recommends hike in anti-dumping duty on hot rolled coils so as to reflect the increase in global raw material prices.

The report called upon urgent government intervention to revive the sector, as the sector’s financial health is important for credibility of banking system. Also, the steel sector is one of the primary contributors of GDP and a key generator of jobs.

It must be noted that the Indian government had earlier announced plans to boost its steel capacity to 300 million tonnes by 2030.