Trade War Between India and China
Press release mentioning, as per our RecycleinME Scrap Report Video dated July 4, 2020. The Indian-China trade war is even more intense as India has lost 20 soldiers on the Chinese border. Moreover, Indian exporters are suffering due to the export consignments from India are under hold by the customs of China and Hong Kong. Exporter Association has communicated with the ministry of Commerce to call attention to the delay in clearance will add the cost of imports. The Ministry of Commerce has given a reply that Customs is physically examining all imports from China.
Delay in Clearance
The delay in clearance would rapidly increase the cost of imports and exporters says that there is no official communication done on this for the extended physical inspection on the import consignment from China. Containers from China are stuck in the isolated zones of Mumbai and Chennai for a physical examination. Ministry of Commerce has requested the Central Board of Indirect Taxes and Customs (CBIC) to take up the issue and announce a denial on the clearance if there is no such official instructions have been given to customs.
Government’s Reply on Delay
The Government of India has clearly claimed that this delay has nothing to do with the Line of Actual Control (LAC), in Eastern Ladakh. The Union Ministry of Finance has given a report saying that this clearance delay is a usual and ongoing routine process on examining the basis of the container of intelligence input and risk assessment and it is one of the security alert practices.
Boycotting Chinese Goods
On the other hand, Due to the India and Chinese border struggle, many protests have erupted and trending in twitter saying #boycottchinesegoods. The large sectors of the Indian industry rely on China for its raw material and finished products. The major electronics and drug raw materials are imported from China. If India decided to boycott the entire Chinese product it would be a fetal sword on either side. There will be a huge impact on India even from the day to day essentials to large scale industrial needs. And on the other hand, China will lose its biggest trading market which includes 80 percent of the antibiotics, 60 percent of electronic components and more.
Increasing Indian Steel Consumption
India is the second-largest steel producer which has the huge capacities of steel making. India has equipped with150 million tones (MT) of steelmaking capacity which can give a steel production of 110 MT and soon to procure 150 MT of Steel. However, the capital usage of steel in India is very low when compared to global steel consumption which is 225 kg per capita and India has only one-third of it which is 75 kg of steel consumption. The Indian government has already taken a safeguard action on this steel consumption by investing in major rural area projects such as Railways, Road Transport, Highways, and Power, etc. A separate group has been set up to monitor regularly. This move of the government will definitely give hope to Indian Steel consumption where the steel industry needs not to search for new markets in the nearby future.
Measures Taken to Reduce Logistics Cost for Steel Players
India has already targeted to produce 255 million tones of steel by 2030. Certain logistics were altered in this mega project like Sagarmala, Bharatmala, and Dedicated Freight Corridor. Through rail, for every 250 kilometers, the transportation cost of iron ore which is a raw material in steel production is Rs 800-Rs 1,000 per tone. Through roadways, it comes under between Rs 2,000 and Rs 2,500 through the road; while via waterways, Rs 450-550 and through the slurry pipeline, it costs between Rs 80-100 only which is cost-effective and reduces the transportation time for materials. According to the Ministry of Steel, slurry pipeline projects totaling over Rs 8,000 crore to be implemented over financial years 2020-2025.
Border Adjustment Tax (BAT)
United Steel Minister Mr. Pradhan has requested the Finance Ministry to urge Border Adjustment Tax (BAT). Indian industry has already placed several demands on the government regarding various taxes inhibited on the domestically produced goods which envelop taxes such as domestic taxes like electricity duty, duties on fuel, clean energy cess, mandi tax, royalties, biodiversity fees that get charged. But most of the goods that are imported are not charged with these levis in their respected countries which are again an advantage in the Indian market. Thus the government of India has taken many precautions and BAT is one of the essential act which offers everyone a fair and equal chance of succeeding.
Find visually video summery on this at https://youtu.be/HMcG3fNrf0c