Sector in focus: Steel
With the anticipation of large scale infra activities, the government has decided to increase the supply of steel in the domestic market. However, the method of it is under scrutiny. The government has revoked anti-dumping duties on imports of alloy steel bars, rods and flat steel products until Sept. 30. Some of the duties were imposed last year amid the heightened geographical tension between India and China.
The move is largely seen as an attempt to increase supply and reduce prices. Domestic steel prices have surged by ~25% during November-December. The surge in steel prices is resulting in a higher cost of production, hurting the domestic manufacturers.
With the reduction in import duty, steel prices are likely to come down. This decision is likely to improve the supply and bring the steel prices down. However, it will open up the floodgates for Chinese manufacturers and hurt the domestic steelmakers.