Steel is making more headlines than perhaps any other Industry in India. Daily there is a barrage of news...cheap steel, dumping and the Government is pitching in with a slew of notifications...BIS, anti-dumping, safe guard duties, MIP (Minimum Import Prices) and the threats continue for port restriction.
The biggest irony is that the steel user industry is larger than the steel producing industry, employs a greater number of people, pays more taxes, generates more foreign exchange. Unfortunately it is more fragmented that the steel producing industry and is less vocal than the producing industry.
Also going out of the window are the basic laws of economics....a country should produce what is cost effective for it. To be fair, there are multiple laws, taxes contribute to the inefficiency despite brave efforts being made by the Government and the Chinese have contributed with their excess capacity.
What worries us and the Steel User industry is that the Bureau of Indian Standard requirements will increase paper work and bring back inspection raj. Also other international standards like ASTM, JIS standards should have been allowed. There will also be scarcity as each mill will need to register for exporting steel to India and what will happen to steel users who require very specific grades and tolerances which are not produced in India and the foreign mills do not have the business volume for this cumbersome process.
In short, we can expect steel price escalation (which is already happening)
Our concluding thoughts are:
Will this protection to local industry be detrimental to the steel using industry?
We also fear retaliatory measures on Indian exports