DRI May Probe Steel Imports from Nepal and China Over Tax Evasion Concerns

New Delhi, Aug 4 (KNN) The Directorate of Revenue Intelligence (DRI) may soon launch an investigation into steel imports from Nepal and China.

This move comes amid suspicions of tax evasion and misuse of Free Trade Agreements (FTAs) that allow duty-free access to certain goods under specific conditions.

According to senior government officials, there are signs that some importers might be wrongly availing duty exemptions on hot-rolled and cold-rolled steel products.

The DRI is particularly focused on imports declared as originating from Nepal, which may have actually come from China or other countries.

Since China-made steel is subject to anti-dumping duties in India, rerouting such goods via Nepal could be a way to bypass taxes.

India and Nepal have a long-standing trade treaty that offers certain benefits, including duty-free import for goods manufactured in Nepal with at least 30% value addition.

However, authorities believe some shipments do not meet this requirement. In such cases, the DRI could classify these goods as non-originating, thereby making them liable for import duties.

The issue gained urgency after the Indian Steel Association flagged rising steel imports from Nepal. Imports of hot-rolled and cold-rolled coils and sheets from Nepal rose significantly between FY23 and FY24.

Officials are concerned that this trend could hurt domestic steel manufacturers and create unfair market conditions.

The potential probe may also examine if any other countries are being used to reroute Chinese steel. In recent months, India has tightened scrutiny of trade routes and FTAs, especially for critical sectors like steel and electronics, to safeguard domestic industries.

If violations are confirmed, importers could face penalties, and future imports from such routes may be subjected to stricter checks or duties.

(KNN Bureau)