Importers are bypassing steel duty: JSW Steel's Acharya

Importers are finding ways to bypass the 12% safeguard duty on steel imports levied in April this year, leading to a rout in domestic prices, even as the import volumes come down, said Jayant Acharya, joint managing director of JSW Steel.

- Dipali Banka & Nehal Chaliawala

One of the workarounds is the misuse of the Advance Authorization Scheme, which allows duty-free imports of raw materials for export-linked production. Importers get 18 months to export the finished product to prevent paying the safeguard duty.

Some non-automotive importers are using this scheme to buy cheaper steel from overseas and sell the finished goods in the domestic market, alleged Acharya. They are betting on the domestic prices softening during the 18-month window allowed under the scheme before eventually using local steel to make products for export, he said.