As a measure to pre-empt dumping from China, the government has slapped restrictions on imports of specific steel items used widely in the automobile, oil and construction industries.
With the shift in seamless tubes and pipes from the 'Free' to 'Restricted' list, the user industries will need a license from the government to import the spatiality steel.
The government has already put curbs on import of hot-rolled coils, the mother steel product, along with imposition of 5 per cent customs duty on specified iron and steel items.
Along with seamless tubes and pipes, wood and wood products would also come under the 'Restricted' list, as per the Directorate General of Foreign Trade notification.
The domestic steel industry with over 55 million tones capacity has seen a sharp change in fortunes with over 30 per cent decline in demand that followed the global meltdown.
With drying of export demand as well, largely because of surpluses in China post-Olympics, the market for steel has turned into a buyer's delight.
The prices in the international market have seen sharp correction from $1,250 a tonne to around $500 a tonne, forcing steep erosion in the domestic rates.
Faced with demand erosion, several steel producers like Essar, JSW and Ispat have resorted to cut in production. They also fear that China, equipped with ten times larger capacity than India, may dump its products in the Indian market.
The government response by way of import restrictions and imposition of customs duty has given some comfort to the industry.
Welcoming the import restriction, Jindal SAW managing director Indresh Batra said: "Had the imports been allowed without restrictions, the Indian market would have been flooded with cheap Chinese products."
