September 07, 2008
Indian commerce ministry toughens stand against steel makers
FE reported that the Union commerce ministry wants Indian government to take a tough stand against steel producers' cartelization and is of the view that the ministry's way of urging them to reduce prices will not help.
Commerce ministry sources told FE that it is in deliberation with the finance ministry on India's looking into the option of imposing a peak export duty of 25% on all categories of steel and pig iron products like China, as restricting exports can improve supply in the domestic market effecting in reduction of prices.
The commerce ministry is proposing that the government come out with a price stabilization scheme and continues it till domestic prices are at par with that of China. The report made the following comparison of domestic prices in India and China
| Item | China | India |
| HRC | 750 | 1206 |
| Billets | 705 | 1022 |
| Pig iron | 613 | 850 |
| CR | 927 | 1275 |
| WRC | 710 | 1250 |
The commerce ministry is of the view that any reduction in duties will not help unless steel producers reduce the base price, on which the excise duty is calculated. Although the finance minister, in the Budget, lowered excise duty on steel inputs from 16% to 14%, there has not been any reduction in prices. Instead prices have gone up.
Mr Kamal Nath union minister of commerce and industry told a media briefing in Singapore that “We will not hesitate to take the strongest possible measures, including using some of the legal provisions we have, against hoarding, against profiteering, whether it is in food or in cement or in steel. We have Section 18 (G) of the Industrial Development Regulation Act. We do not propose using this; and the cement and steel industries must also ensure that the government does not look at it. That is a very stringent provision. We have to persuade them, counsel them. I do not want to see them as buckling under pressure.”
