Keep steel out of FTA with Japan & Korea: Steel Ministry

Tags: FTA, Steel, Economy
Worried over growing imports from Japan and Korea with whom India has free trade pacts, Steel Ministry has suggested shipments from these nations be brought under negative list to safeguard the interest of local firms.

"Under economic agreements between India and Japan/Korea, there are significant imports from these countries due to progressively reducing import duty toward zero duty regime.

"Steel products should come under the negative list to protect domestic industry," the Steel Ministry has said in a presentation for the Cabinet Secretary.

India had signed free trade agreement (FTA) with Korea in 2009 and with Japan in 2011. Under FTA, duties on most of the products traded between the countries are either eliminated or reduced sharply to zero duty regime in phases.

With FTA in place, Japan and Korea enjoy duty benefits. Riding on this, their proportion in India's total steel import kitty was on the rise replacing traditional sources of Russia and the European Union.

India imported 5.445 million tonnes of steel in 2013-14 fiscal. A good part of that basket came from Japan and Korea. India, however, maintained its status as a net exporter of steel during the last fiscal.

Domestic steel firms and industry bodies have been vocal on this issue. JSW Steel Chairman Sajjan Jindal had earlier said since the economies of Japan and Korea were not doing well, these nations were exporting a lot of steel into India at a very low price, taking advantages of these FTAs.

Industry body Assocham also said that there was a need to exclude steel products under Chapter 72 of International Trade Centre (ITC) code from Indo-Korea and Indo-Japan Comprehensive Economic Partnership Agreement (CEPA) to ensure sustainability of domestic steel industry.

According to industry experts, taking out any product from the FTA is possible, but it calls for an intense lobbying with facts and figures for proving the rationale of such a demand.

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