Mumbai: Steel consumers associations have strongly opposed the call from primary manufacturers to impose a 25 per cent safeguard duty saying the move will only increase prices and impact the economy badly.
Over half-a-dozen steel users associations including Steel Chamber of India and Federation of Industries of India among others have opposed the demand made by the Indian Steel Association to the Directorate-General of Trade Remedy seeking a 25 per cent safeguard duty.
They are meeting heavy industries minister Arvind Sawant Saturday to raise their concerns.
Last week, representatives of Indian Steel Association have sought a 25 per cent safeguard duty on imports to curtail dumping after the US and EU set up tariff and quota barriers.
"We disagree with the argument that imports will affect the economy badly. Instead, safeguard duty will make steel costlier and only a few mills will benefit, creating a monopolistic market," associations said in a statement.
Currently, steel imports are around 6 per cent of the total gross domestic production.
"As per WTO rules, safeguard measures are defined as emergency actions in response to a surge in imports. But in reality, imports have significantly come down in the last three years as a result of a series of protective measures, both tariff and non-tariff based that were announced for various steel items since September 2015," it said.
With 12.5 per cent of basic customs duty on most flat products, and a surcharge of 10 per cent, imports from most China, Europe and the Commonwealth of Independent States have become unviable and substantially declined, it said.
India has FTAs with Japan and South Korea, but the quantum of imports from these countries is only a small percentage of domestic demand.
Since 2015, there were many protective measures like minimum import price, safeguard duty, anti-dumping duty and steel quality control order etc were taken to protect primary steel makers. Due to this, steel prices are higher than global prices, the association said.