India's Ministry of Steel does not immediately intend to increase taxes on imported steel, despite the country becoming a net importer of the alloy due to growing shipments from overseas, notably from China, according to a senior government source.

Leading steel producers in India have urged the government to impose higher tariffs on imports in order to curb the influx of overseas supplies into the world's second-largest producer of crude steel, local media reported.

However, the steel ministry has yet to submit a proposal for higher taxes to the finance ministry with robust domestic demand.

Steel mills are advocating for tax hikes on various steel products, currently subject to a 7.5% tax, to discourage imports, the source said.

During the first eight months of the current fiscal year (April to November 2023), India's consumption of finished steel reached a five-year high of 87.1 million tonnes, a 14.9% year-on-year increase.

The source stated that the government will closely monitor import volumes. According to the latest government data, steel imports from China peaked in the April to November period, reaching a five-year high.

The world's leading crude steel producer China emerged as the largest exporter of finished steel to India during this period, selling 1.3 million tonnes, up 48.2% from the previous year.

India is also working on establishing a consortium of state-owned companies to import coking coal, a crucial raw material for steel production, in a bid to facilitate better pricing negotiations for mills.

The proposed consortium, as reported by Reuters last week, aims to address shortages faced by domestic steel companies. Additionally, the government plans to resume talks with landlocked Mongolia as part of its efforts to diversify coking coal sources for India.

(Writing by Riley Liang  Editing by Emma Yang)
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