ArcelorMittal Nippon Steel India is suing the Indian government over rejected met coke import orders, claiming retroactive restrictions threaten its operations. The company argues this undermines free trade principles and poses financial risks. A similar case by JSW Steel amplifies concerns about policy effectiveness in the industry, as the situation progresses through legal channels.

ArcelorMittal Nippon Steel India has initiated legal action against the Indian government following the rejection of its imports of low-ash metallurgical coke (met coke). The company asserts that the government is unfairly applying new import restrictions retroactively, negatively impacting its operations. These curbs, established in January, aim to support local suppliers but have raised concerns among major players regarding the quality of domestically produced met coke.

On March 5, ArcelorMittal Nippon Steel filed a challenge in the Delhi High Court over the government’s dismissal of its orders for 168,300 million tonnes of met coke from Indonesia and Poland. The company claims that this rejection, based on an assertion of adequate domestic supply, contradicts free trade principles. The firm highlights that such retroactive policy applications create significant uncertainty for traders and investors, as stated in their comprehensive court filing.

The company’s legal move intensifies its conflict with Indian authorities, which previously indicated sufficient domestic met coke availability. Leading competitor JSW Steel has similarly sought legal recourse regarding delays in met coke imports valued at approximately $90 million, emphasizing the importance of reliable policy implementation for effective business operations.

ArcelorMittal Nippon anticipates severe production constraints due to the import restrictions, warning that it could incur substantial financial losses—estimated at $25 million per shipment and potential daily vessel detention charges exceeding $27,000. A confidential communication sent to the Indian government indicated that these curbs could compel the company to shut down operations or significantly reduce production.

ArcelorMittal Nippon holds a 5% stake in India’s steel production market, which boasts an annual capacity of 200 million metric tons. Over the past four years, India’s imports of low-ash met coke have surged, although the government has imposed a cap of 1.4 million metric tons for the current period from January to June.

In summary, ArcelorMittal Nippon Steel’s lawsuit against the Indian government highlights significant tensions arising from recent restrictions on met coke imports. The company argues that these policies, applied retroactively, jeopardize its operations and financial stability. As the situation unfolds in the Delhi High Court, the implications for India’s steel industry and the enforcement of fair trade practices remain critical focal points for stakeholders.

Original Source: www.business-standard.com

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