Welcoming the notification issued by the Director General of Foreign Trade (DGFT) for fixing reference price for various steel categories, J J Irani, managing director, Tata Steel (TISCO) said that even now the prices were lower than what existed three years before.

"Only rebates are being recovered. We had offered huge rebates in view of cheap imports which had affected the bottom line of most of the producers," Irani said at a meeting organised by the Confederation of Indian Industry (CII).

Sail chiefArvind Pande said that reference price system was in line with the global trend to curb unfair trade practices detrimental to the interest of domestic industries. Asked whether this would lead to cartelisation, Pande said that in a regime of negotiated prices, where each producer has to negotiate price with the customer, question of cartelisation does not arise.

The international producers were dumping steels in India at very low prices compared to prices which existed in the country of its origin, Irani said. The industry had demanded level-playing field by way of assurance from the government that prices of imported steel were equivalent to the domestic prices of those countries from where the steel was coming and if there was any gap, that should be bridged by way of fixing the reference price.

The DGFT had recently fixed floor prices of hot rolled (HR) coil at $302 per tonne, HR sheet at $317, HR plates at $409 and cold rolled (CR) coils at $392 per tonne.

The landed price for HR coil presently isRs 17,655.53 per tonne at port against the selling price of Rs 14,100 per tonne (ex-works). Still there was a difference to the tune of Rs 3555 per tonne, the producers said. Pande said that sail was in touch with their customers and most of them had shown their willingness in picking the material at current prices.

All major steel producers were producing about seven million tonne of HR coil per annum. Though the imports were not substantial but, Irani said, imports were fixing the bench mark for domestic prices.

The Sail chief had recently urged that excise on steel should be lowered from the existing 15 per cent and import tariffs should be hiked by an average of 5 per cent in the 1999-2000 Union Budget. Expressing his views on the forthcoming Union Budget Pande said, "Considering the resource constraints being faced by the government our tax structure needs to be rationalised to improve revenues and reduce non-Plan expenditure and subsidies. Simplification of the Central excise structure should begiven priority."

For the steel sector per se, he said, "excise needs to be lowered from the existing level of 15 per cent which will lead to increased consumption." Pointing to the fact that past one year has seen unprecedented dip in world prices with many countries putting up import barriers, SAIL chairman said: "To provide a level playing field, it is important to not only retain the existing level of import duties but also hike by an average 5 per cent import tariffs on steel, still within the World Trade Organisation bound rates."

Pande said the immediate thrust of the government should be to give a boost to the economy through actual spending on infrastructure projects. "Indian industry has been suffering badly due to recessionary trends in both global and domestic markets, and is looking forward to pick-up in industrial activity," he said.