China Steel to be af­fected by In­dia’s tar­iff hike: MOEA

The China Post - - BUSINESS -

A de­ci­sion by the In­dian gov­ern­ment to in­crease im­port du­ties on cer­tain steel prod­ucts is ex­pected to ad­versely af­fect the oper­a­tions of Tai­wan-based China Steel Corp.’s ( ) plant in In­dia, the Min­istry of Eco­nomic Af­fairs (MOEA) said Satur­day.

The com­pany’s pro­duc­tion base in the state of Gu­jarat, is ex­pected suf­fer higher op­er­at­ing costs as im­ported steel prod­ucts will be­come more ex­pen­sive af­ter the tar­iff hike, the MOEA said.

Ef­fec­tive Aug. 12, In­dia’s im­port du­ties on steel bars and cer­tain hot-rolled steel plates were in­creased 2.5 per­cent­age points to 12.5 per­cent and 10 per­cent, re­spec­tively, the MOEA said.

It was the coun­try’s sec­ond tar­iff hike on steel prod­ucts since midJune, as it has been try­ing to pro­tect its steel in­dus­try by pre­vent­ing for­eign ex­porters from un­der­cut­ting lo­cal busi­nesses, the min­istry said.

In ad­di­tion to the tar­iff hikes on steel bars and hot-rolled steel plates, the In­dian gov­ern­ment has raised im­port du­ties 2.5 per­cent­age points on a wide range of me­tal prod­ucts such as cop­per, nickel, lead, zinc, alu­minum, and tin.

China Steel’s plant in Gu­jarat launched com­mer­cial pro­duc­tion on Jan. 12, fea­tur­ing an an­neal­ing and coat­ing line, and is aim­ing to roll out an an­nual 200,000 tons of elec­tri­cal steel, a type of value added cold-rolled steel.

De­scribed as the first stage of China Steel’s in­vest­ment in In­dia, the pro­ject was launched in July 2012 and con­struc­tion started in Au­gust 2013, with an in­vest­ment of US$237 mil­lion.

The MOEA said other Tai­wanese steel ex­porters in In­dia are also ex­pected to feel the pinch of In­dia’s higher tar­iffs, which will erode their com­pet­i­tive edge.

In 2014, Tai­wan sold US$176.08 mil­lion worth of steel prod­ucts to In­dia, a 1.43 per­cent an­nual drop, while its mar­ket share fell to 1.54 per­cent from 1.73 per­cent the pre­vi­ous year.

The MOEA said it will con­tinue to voice its con­cerns to the In­dian gov­ern­ment about the higher im­port du­ties and will push for a bi­lat­eral free trade agree­ment to elim­i­nate such trade bar­ri­ers.

Cur­rently, China, South Korea and Ja­pan are three largest steel ex­porters to In­dia, with a com­bined 46.77 per­cent share of the mar­ket. Since South Korea and Ja­pan have com­pre­hen­sive trade agree­ments with In­dia, they will not be af­fected by the tar­iff hikes, the MOEA said.

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