22nd April 2025 (9 Topics)
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India’s Temporary Tariff on Steel Imports
Context
India is likely to impose a 12% temporary safeguard duty on imports of stainless steel to counter the surge of cheap imports, mainly from China, South Korea, and Japan. The move comes in response to concerns over injury to the domestic steel industry, especially smaller producers.
India’s Position in Global Steel Market:
- Steel is considered a strategic and infrastructure-critical sector. Ensuring its health is vital for long-term economic growth, defence needs, and energy infrastructure
- India is the second-largest producer of crude steel globally.
- India has registered a 38 per cent surge in imports of finished steelto 8.319 million tonnes (MnT) over 6.022 MnT imported during the preceding 2022-23 fiscal. The surge in predatory imports from China is a big threat to the Atmanirbharta in steel.
- Finished steelincludes non-alloyed offerings, alloyed ones and stainless steel. Finished steel imports reached a 9-year high at 5 million metric tons.
- Countries Dominating Imports: China, South Korea, and Japan account for 78% of India’s total finished steel imports.
- Domestic Industry Concerns: Indian steelmakers have urged the government to take corrective steps as cheaper imports have forced smaller domestic mills to cut production and consider job losses.
- Protect Domestic Industry: Prevent long-term harm to domestic producers due to underpriced foreign imports.
- Reduce Trade Imbalance: Control the increasing dependency on imported finished steel.
- Support Employment: Avoid job losses in small and medium steel enterprises (SMEs).
- Trade protectionism: Many countries are taking protective trade measures against Chinese steel exports, which are accused of dumping — selling below market price to gain market share. The move aligns India with global trends of trade protectionism, particularly in strategic sectors.
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PYQ Q1. Account for the present location of iron and steel industries away from the source of raw material, by giving examples. (2020) Q2. Account for the change in the spatial pattern of the Iron and Steel industry in the world. (2014) |
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