New Delhi, Dec 16 (PTI) The commerce ministry's investigation arm DGTR has started a probe into an alleged jump in steel imports and it will also consult MSME downstream industries before making its recommendations, a top government official said on Monday.

Commerce Secretary Sunil Barthwal said that the ministry has received a request from the steel ministry for conducting the safeguard investigations.

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"The DGTR is doing it and in the investigation, they look at the whole value chain. So we are looking at not only the HR (hot-rolled) and CR (cold-rolled) coil (steel products) which is coming to India, they are also looking at the requirement of downstream industry whether there is a production imbalance or whether it is an injury because of excess capacity in steel," he told reporters here.

He said that all these stakeholders are being consulted including MSMEs as well as the downstream industries, "then only the DGTR will make a recommendation" in this regard.

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A final call on imposing the duty can be taken by the finance ministry on recommendations of the ministry of commerce.

On December 2, the steel ministry in a meeting with the commerce department had proposed for a 25 per cent safeguard duty on certain steel products imported into the country. Steel Minister H D Kumaraswamy and Commerce and Industry Minister Piyush Goyal were present in the meeting.

While some big domestic steel makers are advocating for imposition of the duty, the user industry is strongly against it as the duty would push raw material prices, impacting their competitiveness.

Domestic steel players have raised concerns over increasing imports of steel from nations like China.

Steel Secretary Sandeep Poundrik last month said more than 60 per cent of steel imports come from FTA (free trade agreement) countries at nil duty and any duty hike will not have any impact on these shipments.

MSME exporters from the engineering sector on Tuesday said that any move to impose additional duties on steel imports would make domestic products uncompetitive and impact the country's outbound shipments from the sector.

Hand Tool Association Chairman S C Ralhan said that the MSME engineering exporters are already facing problems on the liquidity front and high prices of steel in the domestic market.

"Increasing prices of steel by domestic steel makers are hurting us and now we have seen in the media reports that the government is planning to impose a 25 per cent safeguard duty. This will severely impact MSME exporters," Ralhan said.

Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said that if the government imposes additional duty, they should ensure that the domestic steel companies do not increase the prices of the inputs.

"Increase in input prices will impact exports of value-added steel products," Sahai said.

Domestic steel players are raising concerns over rising cheap steel imports from select nations like China.

Think tank Global Trade Research Initiative (GTRI) in its report has claimed that India's steel imports are neither excessive nor unwarranted as half of these imports are critical raw materials for domestic production, while 40 per cent consist of specialised items that India does not produce in sufficient quantities.

GTRI Founder Ajay Srivastava has said that steel imports are just 6 per cent of domestic production and an estimated over 70 per cent imports are done by large steel firms.

"In FY2024, domestic production met 94 per cent of India's steel demand, with imports contributing just 6 per cent. Over half of these imports consist of steel scrap (33.8 per cent) and semi-finished steel (17.3 per cent), both of which support domestic steel production. Such imports are made by large steel producers," he has added.

The remaining 43.4 per cent imports are of high-end flat-rolled steel products used in critical industries like automotive, construction, and household appliances.

(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)