Do not import cheaper material, support domestic players: Goyal to industry

New Delhi, Sep 9 (PTI) Commerce and Industry Minister Piyush Goyal on Tuesday expressed concern that the domestic industry often rushes to import cheaper material at the slightest opportunity, instead of supporting domestic players.

He said the spirit of supporting each other must be inculcated across the value chain, starting with the steel industry, if it wants others to emulate.

Goyal added, "we are also trying to find innovative ways to address the CBAM (Carbon Border Adjustment Mechanism) story".

The EU has announced to impose carbon tax on carbon emitting sectors like metals and fertilisers.

The minister said although the Indian industry produces high-quality steel products, companies in countries like Japan and Korea prefer to buy from their domestic firms.

India has a free trade agreement (FTA) with both Japan and Korea. The domestic industry has time and again raised concerns over increasing steel imports from these countries.

"...I have been fighting with my counterparts in both these countries over the past 5-6 years, I do not think we have been able to make much indoors into those markets because there is a big sense of national support (in Japan and Korea) to support each other," he said here at a steel conclave.

Goyal said Prime Minister Narendra Modi has called for Atmanirbhar Bharat or self-reliance, "but sadly, we in India will not lose the slightest of opportunity, even we can get something a little cheap, we will immediately rush and import that material".

He said industry needs to look at their import-export profile and work on reducing import dependence by either producing or purchasing from Indian firms.

"...you need to see, what are you importing, and is there a possibility to develop that in India, or develop a source in India, or work in partnership with your supply chain or other stakeholders and become self-reliant," he suggested.

Citing the recent problems being faced by the world due to restrictions imposed on rare earth permanent magnet exports, the commerce minister said it almost brought the entire auto industry to its knees.

"And even after that, if we are not able to understand the importance of Atmanirbhar Bharat or supporting each other to ensure that Indian industry does not die in the face of predatory pricing, it is our collective duty," he cautioned.

Goyal said although the government imposed a 12 per cent safeguard duty on steel products at the industry's request, the sector failed to support the domestic met coke industry when it needed help.

"When met coke needed protection, I didn't get support from the steel industry. For a few dollars saving, you prefer to import met coke, and almost brought the entire met coke industry on knees, killed it, little realising that once you did not have met coke suppliers in India, you were at the mercy of foreign companies, and they could have charged you an arm and a leg, and you would have had to pay. There would have been no met coke producers in India," he said.

Met Coke, or metallurgical coke, is primarily used as a fuel in the iron and steel industries, especially in blast furnaces to convert iron ore into molten iron.

It is a wake up call for all, he said, adding the message of swadeshi, self-reliance, supporting each other and protecting each other's business, must be upheld.

"Even now, I'm getting requests... when we licensed met coke that everybody wants to shift to one particular jurisdiction. I'm not doing it, by the way, so don't even bother to apply. Whatever is the country for which you got it, either you get it from there or you buy Indian.

"I don't know why we were forced to give you a quota, but the whole rules of the game are such that we had to give a quota. We may not continue it... better develop your met coke suppliers, develop enough capacity, because if you don't support your suppliers, there's a whole world out there who says that we should not be supporting the steel industry," he said.

The minister also emphasised on cutting imports of capital goods.

He said the steel industry has huge opportunities in sectors such as shipbuilding, and construction.

"I am working with the shipping ministry to see what policy changes can help us attract vessels to flag in India... we are working with the mining industry to see how we can reduce our dependence on coal from other countries and bring down the cost of raw material so that we can be more competitive with rest of the world," Goyal said.

He added that to protect the industry, India is including the concept of "melt and pour" in FTAs. But it is not there in the trade pacts with ASEAN, Japan and Korea and they can "jolly well get low cost steel through a transfer pricing and export to India". PTI RR TRB