The government's re-think comes barely two months after it notified the floor price for import of steel seconds and defectives as well as prime steel. The decline in prices had been set in motion after the imposition of anti-dumping duties on some steel items by the finance ministry earlier, sources said.

The minimum c.i.f price fixed by DGFT is $ 232 for HR coils (TMQ), $ 243 for hot rolled sheets, $ 299 for cold rolled coils, $ 545 for tinplates, $ 577 for electrical sheets (CRNO), $ 311 for plates and $ 560 for alloy steel bars and rods (hot rolled in coils)--all prices on per tonnebasis (cif).

DGFT followed the import floor set for seconds and defectives with a notification fixing the cut-off price for seven grades of prime steel based on the average Japanese and European steel prices.

The effect of prescribing the minimum cif value implies that imports of the above-mentioned items treated as "restricted" will require a licence.

It is understood that imports of these items above the minimum cif value will be permitted without a licence. The division in the steel industry on the floor price came to the fore during a news conference organised by the Confederation of Indian Industry in Delhi on Thursday.

While the steel majors unanimously demanded a level playing field for the domestic industry to overcome the demand slump and international steel recession, cold rolled steel manufacturers association and tin-plate manufacturers association wanted the withdrawal of the notifications issued by DGFT.

The two downstream industries termed the notifications as unfair and felt that ithad resulted in the government giving domestic HRS makers a mandate to raise prices. This they felt would make import of CR coils cheaper.