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Seconds steel imports only through 3 ports

G. Rambabu

K.R. Srivats

NEW DELHI, Dec. 5

THE Government has tightened the screws on the influx of `seconds' and defective steel products into the country by restricting their import only through the designated ports of Mumbai, Chennai and Calcutta.

The Directorate General of Foreign Trade (DGFT) has issued a notification making it mandatory for imports of these items to be routed through these ports. Inflows through any other port will not be allowed. At the same time, the vigilance at the designat ed ports have also been strengthened.

According to the notification, ``import consignments of the seconds/defectives of steel items shall be accompanied by a pre-shipment certificate regarding description of material, material quality, chemical analysis of the material, visual inspection, th ickness and width of material and ITC (HS) Code No. from any of the official inspection agencies''.

The products which have been targetted are hot rolled (HR) coils, HR sheets, cold rolled (CR) coils, tinplates, electrical sheets, plates, alloy steel bars and rods.

``Only last week the DGFT had notified that imports of 131 products, including steel products, have to confirm to Indian quality standards, which effectively put a barrier in the free imports of these products at lower prices. Now, by routing them throug h specific ports and making it mandatory to get quality certificates, the domestic steel industry can rest easy,'' officials said.

They noted that this had become necessary due to the increase in the imports of defective steel products and tinplates at low prices, causing heavy loss to the domestic producers. Particularly in the case of tinplates, it also has a repercussion on the h ealth and safety aspects, since they are being clandestinely used in place of the ``prime'' material.

In fact, the Steel Ministry had forwarded four lines of action to be pursued by the DGFT to stop this ``legal dumping'' of steel products.

The first was to place these items on the restricted list (RL), the second to continue with the floor price mechanism, the third to restrict their imports through specified ports and the fourth to pursue a differential pricing system.

Either of these, it was felt would act as an effective deterrent to the imports of the defective steel products, which now account for quite a substantial proportion of the total steel imports.

However, it was finally decided to resort to the third option of regulating the inflows through Mumbai, Chennai and Calcutta.

``The last option of resorting to a differential pricing system seems quite viable even now. Under this system, while the prime steel products will attract a single duty rate, the seconds/defectives will face a higher duty. But this is a decision that ca nnot be decided by the DGFT, it will have to be taken by the Union Finance Minister in his Budget for 2001-02,'' the sources said.