China has decided to increase the import quota for various steel products, including stainless steel, with effect from April.

China has also decided not to impose additional tariffs on steel imports into the country. At present, the safeguard duty on steel imports is 18 per cent.

However China has decided not to lower the duty structure. "Though China has decided to continue with the 18 per cent duty on steel imports, the increase of quotas will enhance India's export to the country. China is the most important market for India at present," said Arvind Parakh, finance director, Jindal Strips Ltd.

Jindal Strips' key market is China. In 2002, India exported iron and steel worth $262.02 million to China, compared to $200.07 million in 2001.

The Chinese foreign trade ministry had decided to raise the import quota due to increasing demand, particularly in the wake of the Olympics due in 2007, said an industry analyst. China had set the quotas after the US imposed restrictions on steel imports in 2002.

AS Firoz, chief economist, joint plant committee of the steel ministry, said the Chinese market would determine global steel prices over the next few months.

"With the US imposing various restrictions on steel imports, most producers have started looking at China, where the demand is huge," he added.

As per government data, India exported 2.5 million tonnes of finished steel and about 250,000 tonnes of semi-finished steel during April-December 2002, as against about 2.05 million tonnes of finished steel and about 205,000 tonnes of semi-finished steel during the same period in 2001.