Indian Steel Ministry Proposes Port of Entry Restrictions to Curb Imports

Aimed at restricting imports through yet another non-tariff measure, the steel ministry has solicited introduction of port of entry restrictions for scrap and second hand or defective steels.

The proposal was mooted recently by the steel ministry in a meeting with its commerce counterpart in which the measures, both tariff and non-tariff, that may be taken to reduce unnecessary steel imports and boost exports were discussed at length.

While some claim that port of entry measure makes importation more burdensome and thus constitutes a de facto import restriction; others feel the port of entry measure does not have a significant negative impact on legitimate trade but is effective in combating smuggling and under-invoicing.

India has become a net importer of steel after a gap of three years. Imports were high primarily due to predatory imports from excess steel producing nations such as China, Japan and Korea. This has rekindled the spectre of 2015-16 among the steelmakers.

While Indian steelmakers are not opposed to imports of some high-value data-x-items as domestic productions are not sufficient; they are in a tizzy because of growing inward flow of some basic products such as wire rod and other construction items.

The steel ministry suggests that there are few genuine reasons for introduction of port of entry restrictions as this would reduce port congestion given Indian ports' limited cargo-handling capacity. The move would augur well for the environment as well.

It also argued that with the port of entry restrictions in place, products such as scrap and defective steels can only be imported through certain ports as only some ports will have testing facilities.

Recently JNPT and ICD Tuglakabad were added in the list of ports for importing defective data-x-items of steel. India imports defective coated flats, tinplates and others worth about INR 1,500 crore a year.