Lok Sabha Question No. 109 (STARRED), answered on 2016-05-02
Subject: Promotion of Steel Industry
Ministry: STEEL
Asked by: G. HARI, M. K. RAGHAVAN

## LOK SABHA STARRED QUESTION NO.*109 FOR ANSWER ON 02/05/2016

## PROMOTION OF STEEL INDUSTRY

- *109.  SHRI G. HARI:

SHRI M.K. RAGHAVAN:

Will the Minister of STEEL be pleased to state:

- (a) whether the Government is aware that the steel industry is struggling in the face  of  increased  cheap  steel  imports,  slow  down  in  the  domestic  and  global demand, if so, the details thereof and the reaction of the Government thereto;
- (b) whether most of the top steel companies in the country including public sector undertakings are  incurring  heavy  losses,  if  so,  the  details  thereof  and  the  reasons therefor;
- (c) whether the Government proposes to provide a special package to bail out the steel industry, if so, the details thereof; and
- (d) the other steps taken/proposed to be taken by the Government for protection and promotion of the domestic steel industry?

## ANSWER

THE MINISTER OF STEEL AND MINES (SHRI NARENDRA SINGH TOMAR)

(a)to(d):  A Statement is laid on the Table of the  Lok Sabha.

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STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (A)  TO  (D)  OF  THE  LOK SABHA STARRED QUESTION NO.*109 FOR ANSWER ON 02/05/2016 TABLED BY  SHRI  G.  HARI  AND  SHRI  M.K.  RAGHAVAN,  MEMBERS  OF  PARLIAMENT REGARDING PROMOTION OF STEEL INDUSTRY.

- (a) The  Indian  steel  industry  is  currently  passing  through  a  severe  downturn. Globally, demand slowdown and overcapacity have resulted in major steel producing countries  like  China,  Japan  and  Republic  of  Korea  adopting  predatory  pricing strategy and  dumping their products in India at prices often lower than their cost of production. Consequently,  domestic  producers  have  considerably  reduced  prices thus eroding their profit margin.
- (b) Yes,  Madam.    Financial  Performance  of  selected  steel  producers  in  the country during the last two Financial Years is given below:-

(Rs in crores)

|                        | 2014-15   | 2015-16   | 2015-16   | 2015-16   |
|------------------------|-----------|-----------|-----------|-----------|
| Name of Steel Producer | Full Year | Quarter 1 | Quarter 2 | Quarter 3 |
| SAIL                   | 2092.68   | -321.64   | -1055.96  | -1528.73  |
| TATA Steel             | 6439.12   | 1248.61   | 2522.92   | 452.82    |
| JSW                    | 2166.48   | 30.75     | 241.00    | -4142.22  |
| RINL                   | 62.38     | -126.1    | -309.02   | -604.87   |
| JSPL                   | -310.68   | -267.28   | -203.67   | -402.12   |
| Bhushan                | -1257.1   | -3584.68  | -732.79   | -697.15   |
| Monnet                 | -795.88   | -375.35   | -394.71   | -479.17   |
| Tata Sponge            | 91.89     | 7.09      | 5.69      | 5.24      |
| Tata Metallic          | 83.66     | 6.82      | 6.41      | 11.65     |

Source: ERU/JPC

- (c) For reducing the stress in steel sector, RBI has extended 5:25 scheme in July 2015,  whereby longer amortization period for loans to projects in infrastructure and core  industries  sectors,  say  25  years,  based  on  the  economic  life  or  concession period of the  project, with periodic re-financing, say every 5 years, is allowed
- (d) In order to protect the interests of country's steel industry, the Government has taken the following steps :
- (i) To  ensure  that  only  quality  steel  is  produced  or  imported,  Government  has notified Steel & Steel Products (Quality Control) Orders, 2012 dated 12.03.2012 and Steel & Steel Products (Quality Control) Orders, 2015 dated 15.12.2015.
- (ii) To increase availability of Coal and Iron ore for the domestic steel industry:-
- (a) Notified  the  Coal  Mines  (Special  Provisions)  Amendment  Act,  2015  on 30.03.2015 to streamline coal block allocations.
- (b) Notified the Mines and Minerals (Development and Regulation) Amendment  Act,  2015  on  27.03.2015  to  streamline  grant  of  Mining Leases.

- (iii) The  Union  Budget  2015-16  had  raised  peak  rate  of  basic  customs  duty  on both flat and non-flat steel to 15% from 10%.
- (iv) Hiked import duty on  ingots & billets, alloy steel (flat & long), stainless steel (long)  and non-alloy long products from 5 % to 7.5%  and non-alloy and other alloy flat products from 7.5% to 10%.  This was further revised in August, 2015 on flat steel   from  10%  to  12.5%,  long  steel  from  7.5%  to  10%  and  semifinished steel from 7.5% to 10%.
- (v) In  November  2014,  the  import  of  rebars  was  ensured  strictly  as  per  Steel Product Quality Control Order 2012, to block influx of cheap imports of boron added rebars.
- (vi) Imposed  in  June,  2015,  an  Anti-Dumping  Duty  for  five  years  on  imports  of certain variety of hot-rolled flat products of stainless steel from China ($ 309 per tonne), Korea ($ 180 per tonne) and Malaysia ($ 316 per tonne).
- (vii) Imposed, Safeguard Duty of 20% in March 2016 on hot-rolled flat products of non-alloy and other alloy steel, in coils of width of 600 mm or more.
- (viii) Imposed,  vide  its  notification  dated  05.02.2016,  the  Minimum  Import  Price (MIP)  condition  on  173  steel  products.  Imports  of  items  covered  under  this notification will not   be allowed into the country below the notified price.

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