Iranian steel imports need to be banned as the trade gravely violates the U.S. sanctions on Iran which could attract retaliatory measures against India from the U.S.
The Indian Steel Association (ISA) has reportedly urged the government of India to take immediate action for banning imports from Iran, as shipments from the Persian Gulf country has increased by nearly five times.
Supposedly, Iranian imports had surged after U.S. sanctions were imposed on Tehran and this trend could lead to serious implications under the Countering America’s Adversaries Through Sanctions Act (CAATSA). The ISA suggested that increased imports from Iran through the UAE at predatory prices have fueled the concerns of steel companies in India.
Bhaskar Chatterjee, the secretary general of ISA, mentioned in a letter that whether directly from Iran or through transshipment via UAE, steel imports need to be banned as the trade gravely violates the U.S. sanctions. This, in turn, could attract retaliatory measures against India from the U.S., he said.
The members of ISA include Tata Steel, Essar Steel, JSW, JSPL and Steel Authority of India. Over the last 8 years, Iran seems to have gradually increased output while local demand has shrunk for the tenth largest producer of infrastructure allow in the world. Apparently, surplus capacity has reached 36% or 12.2 mt, though the per capita consumption has reduced by 14%. Indicating a threat of diversion to India, 30% of Iran’s steel is exported to ASEAN.
Reports confirm that in 2017-18, the imports from Iran increased by 66%, though the imports were nil up to December 2018. Imports have been routed via the UAE through change in country of origin.
ISA said that UAE, a net importing nation, suddenly has a 390% increase in exports which is an alarming development. These exports include 65,000 tons of flat steel products, which the country conventionally imported. This proves the transshipment of steel originating in Iran via the UAE. The top three steel companies belong to state-run Iranian Mining and Mining Industries Development and Renovation Organization, on which the sanctions from U.S. apply.