New Delhi urged South Korean steelmaker POSCO last month to buy local raw material for its automotive steel plant in western India, two government sources said, trying to cut imports and boost domestic production of high-value steel.
The steel ministry’s request to POSCO came amid other efforts to safeguard local mills, including import taxes on steel products and a floor price on overseas purchases. New Delhi also initiated probes into the possible dumping of cheap steel into India by China, Japan and South Korea. POSCO primarily produces high-tensile auto grade steel from its facility in Maharashtra state and has been importing most of the raw material – hot-rolled (HR) coils – from Korea, helped by a free trade agreement between New Delhi and Seoul. But POSCO’s costs rose after India imposed a “safeguard” import duty of up to 20 percent starting September last year.