Government needs to reevaluate FTAs with South Korea, Japan

The Dollar Business Bureau

Essar Group on Friday said India must re-evaluate its free trade agreements (FTA) with many partners, including South Korea and Japan, as their duty-free imports stance is hurting Indian steel manufacturers.  

Addressing a conference in New Delhi, Essar Group Director Prashant Ruia said, “It will be in the interest of the industry to re-evaluate the free-trade agreements we have with Japan, Korea and Thailand that are permitting duty-free imports and are hurting the domestic steel producers.”

Ruia further said the anti-dumping duty and safeguard measures taken by the Indian government have helped to safeguard the domestic steel sector against the onslaught of unfair dumping of the metal. Many other steel-manufacturing countries such as the US and Europe have also adopted a similar approach to protect their domestic steel industry.  

"We are thankful to the government for timely support in reviving the sector. The imposition of safeguard duties and the anti-dumping measures are all steps in the right direction taken in a timely manner. However, we need to evaluate these measures on par with what other steel producing countries are doing. And we must ask ourselves if we are doing enough," he said. 

Ruia also urged the government to introduce a new steel policy to make the usage of Indian steel compulsory for all government projects. 

"Further, the government has announced several large infrastructure projects. I urge you (steel minister) to come out with a policy that makes usage of Indian steel mandatory for all government projects, like the 'Buy America Program' in the US to further encourage demand growth in the sector," Ruia said.  

Ruia, however, underscored that the domestic steel industry is still expanding at a limited growth rate, due to some legacy issues. The government has made an all-out attempt to resolve these issues by bringing transparency and addressing core concerns. 

He also advocated a long-term stable policy regime to ensure the sector achieves an overall growth, while also providing confidence to the new investors.