Steel should be set aside from FTA with Japan and Korea: JSW

In view of growing imports of steel from Japan and Korea into India, leading private sector firm JSW Steel today demanded removing steel from the purview of free trade pact with the two Asian economic superpowers.

"India has signed FTA with Japan and Korea. The economies of these two are not doing well, specially in Japan. So, they are sort of exporting a lot of steel into India at a very low price, taking advantages of these FTAs," JSW Steel's Chairman and Managing Director Sajjan Jindal said on the sidelines of an Assocham event.

"Japan and Korea are pushing more steel into India. There is more than 300% increase in imports of steel in just one year from these countries. So, the government needs to sit back and take a look at this. Steel should be outside of the purview of FTA," Jindal added.

India signed FTA with Korea in January 2010 and with Japan in August last year.

Under FTA, duties on most of the products, traded between the countries, are either eliminated or reduced sharply. Duties in the related cases come to zero levels in phases.

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.

India's steel import stood at 6.83 million tonne in 2011-12.

According to Joint Plant Committee of the Steel Ministry, imports went up to 2.88 million tonne during April-July period of the current fiscal as against 1.88 million tonne in the same period of last year, a growth of over 53%.

Jindal said steel imports into India during the current fiscal could be over eight million tonne, which is around 10% of India's total demands.

Cashing on the duty benefits, Japan and Korea have also become the leading exporters of steel to India, replacing the traditional exporters European Union and Russia.

While import duty on Korean and Japanese steel products have been reduced to 3.13% from 5% in 2010, imports from other geographies attract 7.5% import duty.

"Japan and Korea have got large capacities, which they can't consume in their own countries. They were dependent on China for exports earlier. Now, China itself has built up huge capacity. Because of the duty differential (due to FTA) big advantage is going to Japan and Korea," he said.

Easier access to cheaper loans also put steel makers of Japan and Korea in a better position than India.

"Indian companies should be given a level-playing field," he said.

Regarding exports of raw materials, he said minerals should be retained in the country and no country of India's magnitude should allow minerals to be exported.

"We must value add in the country which can create more jobs. We must export finished products. It should be exactly the reverse from the current trend". Jindal said.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Signalling good times, current account deficit is likely to grow from here on

    The current account deficit (CAD) numbers for April-June quarter declined sharply to 1.7 per cent of GDP.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Disruptive innovation in education

The past two weeks had a fair share of interesting ...

Rajgopal Nidamboor

Regain the spirit of focused power

For aeons, the human race has been experimenting with a ...

Gautam Gupta

Manufacturing must keep workers’ welfare in mind

It may be early days yet, but the labour reforms ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture