MUMBAI (Reuters) - Indian steel firms want the next government to control cheap imports of the alloy into the country to support the local industry and step-up investment in infrastructure to boost demand, officials said.
Prime Minister Manmohan Singh’s coalition defied predictions of a tight election result and was only about 11 seats short of an outright majority following the vote count.
A strong coalition, free of the pressures from its former communist partners, has boosted the prospect of reforms to encourage growth in Asia’s third-largest economy.
“The world is going through recession so India should continuously monitor that products from certain countries are not brought into our country and sold at lower price,” said J. Mehra, chief executive officer of Essar Steel.
Essar Steel is part of the diversified Essar Group.
Associated Chambers of Commerce and Industry of India has also called for policy measures to check dumping of cheap steel while an Ispat Industries official said safeguard duty should be the top priority of the next government.
Indian steel firms saw profits slump or even post losses in the December and March quarters on weak demand, a steep fall in steel prices and surging raw material costs.
“The demand we are seeing now is mostly seasonal, I’d say. Real demand has not come up so far,” Anil Surekha, executive director of Ispat Industries, told Reuters over the telephone on Monday.
The government is also expected to boost investment in infrastructure, which could provide a fillip to steel and related sectors, company officials said.
“There should be a lot of attention on capital outlay for infrastructure. The government should make policies that promote exports,” Mehra said in an e-mail reply to Reuters.
However, analysts said government measures will take time to sink in and that global cues were more crucial.
“These are global sectors. Their realisations are linked to the LME (London Metal Exchange). If steel prices fall globally, it could create a mess here,” Kamlesh Bagmar, an analyst with Prabhudas Lilladhar said.
The government had cut excise duty on steel to 8 percent in the interim budget for 2009/10 and imposed anti-dumping duties for six months on cold-rolled flat stainless steel last month, and so chances of more steps immediately were unlikely, he added.