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Steel majors seek total ban on import of seconds, defectives

G. Rambabu

NEW DELHI, Feb. 21

NOT satisfied with the measures taken by the Director-General of Foreign Trade (DGFT) to regulate the inflow of seconds and defective steel products into the country, steel majors, Steel Authority of India Ltd (SAIL) and Tata Steel, have sought an immedi ate ban on imports of such products.

According to official sources, alarmed at the surging imports of such products at cheaper rates, both the companies have asked the Steel Ministry to intervene and bail them out.

``The DGFT measures, which were supposed to stop such unbridled inflows, have made no dent at all. This has caused a great deal of damage to the domestic producers. Although stiff quality norms have been put in place, it has been of no use; seconds and d efectives are still flooding the market,'' they said.

The sources noted that the trend has been noticeable over the past five years. As far as hot-rolled (HR) coils are concerned, seconds and defectives accounted for just 5.2 per cent of the total imports of the product in 1995-96. But by 1999-2000, they j umped to 28.4 per cent, and this fiscal, the imports are estimated to be much greater.

Imports of cold-rolled (CR) coils have, on the other hand, shown a fluctuating trend. From 33.4 per cent in 1995-96, they now account for 36.56 per cent of the total imports .

Tinplates are another problem area for both SAIL and Tata Steel. Since they are the only producers of tinplates in the country, they have been badly hit by the surge in imports of inferior tinplates at lower rates.

Following pressure from the Steel Ministry, the DGFT recently made it mandatory for all shipments of defective steel products to comply with the mandatory quality standards, putting them on par with the domestic producers.

By making it mandatory to maintain the quality standards required by the Standards of Weights and Measures (Packaged Commodity) Order, 1977, it was supposed to make it virtually impossible to import cheap and sub-standard steel products into the country . Importers are also required to register themselves with the Bureau of Indian Standards.

Another measure that the DGFT has taken is to allow inflows of seconds and defective items only through designated ports of Mumbai, Chennai and Kolkata.

And, all import consignments of the seconds/defectives of steel items have to be accompanied by a pre-shipment certificate regarding description of material, material quality, chemical analysis of the material, visual inspection, thickness and width of material and ITC (HS) Code No from any of the official inspection agencies.

``All these measures have done nothing to restrict these imports. The only solution lies in banning the imports altogether. In developed countries, secondary and defective materials are non-tradable items and are generally discarded, rejected or recycl ed. If foreign buyers are ready to buy such inferior materials, they are sold to them at whatever prices they offer,'' they said.

They noted that as such, these sub-standard materials are not domestically used by the developed countries. And hence, India remains a favourite hunting ground for them.