The growth rate of India’s steel industry declined to 0.5% in the financial year through March 2015 from 11.5% the previous year, India’s commerce and industry ministry says in its Index of Core Industries (ICI). This “… was mainly on account of procedural and infrastructural bottlenecks faced by the industry.”

Over the last twelve months Indian steelmakers have suffered from a combination of increased imports from China and other East Asian countries. It has also had to bear a domestic shortage of iron ore and coal due to government mining bans and Supreme Court mine permit revocations.

Last month India’s finance ministry received a request from the steel ministry to implement a 25% duty on imports of steel in order to “prevent dumping” (see Kallanish 27 April).

In its new fiscal year budget India increased its peak rate of basic customs duty on steel product imports from 10% to 15%.  This allowed it to enable a hike of up to 15% in actual steel import duties without requiring the consent of parliament (see Kallanish 2 March). However, import duties themselves did not change. These remain at 5% on semi-finished products and bars/rods, 7.5% on hot and cold rolled coil, galvanized coil and plate and 2.5% on iron ore and scrap.

With iron ore, meanwhile, high domestic prices coupled with insufficient infrastructure to import raw material have squeezed mills' margins further. State-owned iron ore miner NMDC finally slashed its prices last month after the Associated Chambers of Commerce & Industry of India (Assocham) urged the government to reduce iron ore prices by 25%. This was done to help domestic steel industry become more competitive (see Kallanish 20 April).

The mines ministry revealed that of 793 registered iron ore mines, 596 are not operating. All 330 in Goa remain idled, whilst work at 106 of 143 in Odisha is also still halted.