Indian Express reported that the India steel industry has demanded that the government expressly place steel on the negative list in the Comprehensive Economic Partnership Agreements with South Korea and Japan failing which, it could bring about severe stress on capacity expansions and eat into its profits.
Led by JSW and Essar, domestic steel majors have recently told the commerce and steel ministries that the CEPAs inked with Japan and South Korea will lead to progressive elimination of custom duties by 75% and 94% in 10 years.
This concern comes amid the capacity expansion domestic steel makers have taken by investing over INR 300,000 crore. =
The steel industries in Japan and South Korea are also no exceptions as both these nations had more production than demand. South Korea produced 18% more steel and Japan had 41% surplus production.
Mr Jayant Acharya director for marketing at JSW said that “This (surplus from Japan and Korea entering the country) could adversely impact the ongoing and future capacity expansion plans and could result in further pressure on the current account deficit. Steel products need to be removed from the concessional duty structure of FTA and reinstated to the prevailing duty tariffs.”
Echoing similar sentiments, Mr Vikram Amin executive director of Essar Steel said that “We need to understand that thousands of crores of rupees have been invested and lakhs of people have been employed, which is why we want the government to intervene.”
Source - Indian Express