NEW DELHI: Auto sector and other related industries heaved a sigh of relief on Friday following the Indian government’s decision to lift curbs on import of hot-rolled steel, which is mainly used in the automobile and consumer durable industries.
The Directorate General of Foreign Trade (DGFT) issued a notification in this regard on Friday. The government had put the mother steel product in the restricted category in October 2008, which meant that the users required an import licence from the government.
Experts said the government is allowing free imports as the domestic demand is picking up and steel prices have gone up by 10-14 per cent in the last 45 days.
During April-December 2008-09, the imports of this product were worth $2.33 billion.
According to the Indian ministry of metallurgy in April to November 2009 steel import amounted 4.58 million tonnes which was by 11 % more than a year ago.
According to the ministry, at that steel products consumption, specialists grew in this period by 8.1 % and amounted 36.0 million tonnes. It is possible to assume that in 2009-2010 Indian financial year the demand for steel rolled products in the country will amount about 61 million tonne to 63 million tonne, 7.5 million tonne to 8 million tonne of which will fall on import.
Being less dependent on import to WESTERN countries than most neighbours, India little suffered from the crisis. At that the Indian government could develop and implement the economy stimulating program, rather rapidly by local standards.
Steel consumption in India is growing by 7% to 10% a year due to, first of all, construction, automobile industry, and housing appliances manufacturing. At that significant reduction of GDP growth is not expected in the nearest years. Indian government undertakes efforts on the welfare increase in rural areas, where hundreds of millions people live. In cities middle class population grows. National industry oriented mostly to domestic market shows decent growth rates. Obviously, steel consumption in the country will exceed 75 million tonnes by 2012.
In 2000 years steel production increase in India was lower than in China only. In 2008 55.05 million tones of steel were produced in India, whereas 10 years ago this figure was lower than 23.9 million tonnes. In the beginning of 2009 India was the world’s third steel producer.
However in 2009 Indian metallurgy growth lowered. In 10 months steel output volume amounted 46.36 million tonnes which exceeds 2008 figures by less than 1%. At that the case is not only the crisis but also the fundamental slowdown.
Source : commodityonline.com