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MRTP ACT, 1969MRTP ACT, 1969&&

CURRENT SCENARIOCURRENT SCENARIO

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IntroductionIntroduction

““Monopolistic and Restrictive Trade Practices act, Monopolistic and Restrictive Trade Practices act, 1969, was an important piece of economic legislation 1969, was an important piece of economic legislation designed to ensure that the operation of the designed to ensure that the operation of the economic system does not result in the concentration economic system does not result in the concentration of economic power to the common detriment”of economic power to the common detriment”

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ORIGINORIGIN

The authority for this act was derived by the The authority for this act was derived by the Government from the Directive Principles of State Government from the Directive Principles of State Policy contained in Article 39 of the Constitution of Policy contained in Article 39 of the Constitution of India which enjoins upon the State to secure that “the India which enjoins upon the State to secure that “the operation of the economic system does not result in operation of the economic system does not result in the concentration of wealth and means of production the concentration of wealth and means of production to the common detriment”to the common detriment”

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Major ObjectivesMajor Objectives

• Regulation of Monopolies and prevention of Regulation of Monopolies and prevention of concentration of economic power; andconcentration of economic power; and

• Control of monopolistic, Restrictive and Unfair trade Control of monopolistic, Restrictive and Unfair trade practices which are prejudicial to public interest.practices which are prejudicial to public interest.

Amendments to ActAmendments to Act The Act came into force from 1The Act came into force from 1stst June, 1970 and has June, 1970 and has

been amended in 1974, 1980, 1982, 1984 and 1991 been amended in 1974, 1980, 1982, 1984 and 1991 before it was replaced by Competition Act, 2002before it was replaced by Competition Act, 2002

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Monopolistic Trade Practices (MTP)Monopolistic Trade Practices (MTP)

““Monopolistic Trade Practice is an act that has or is Monopolistic Trade Practice is an act that has or is likely to have, the effect of unreasonably preventing or likely to have, the effect of unreasonably preventing or lessening competition in the production, supply or the lessening competition in the production, supply or the distribution of any goods or services; limiting technical distribution of any goods or services; limiting technical development and capital investment to the common development and capital investment to the common detriment; or allowing the quality of goods or services detriment; or allowing the quality of goods or services to deteriorate”to deteriorate”

Two relevant testsTwo relevant tests • Abuse of market power; andAbuse of market power; and• Unreasonableness in any practiceUnreasonableness in any practice

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Major MTPsMajor MTPs

• Unreasonable prices for goods or servicesUnreasonable prices for goods or services• Limiting technical development or capital investment Limiting technical development or capital investment

to the common detrimentto the common detriment• Unreasonably preventing or lessening competitionUnreasonably preventing or lessening competition• Allowing quality to deteriorateAllowing quality to deteriorate• Increasing unreasonably cost of production or Increasing unreasonably cost of production or

maintenance of servicesmaintenance of services• Unreasonable selling priceUnreasonable selling price• Unreasonable profitabilityUnreasonable profitability• Preventing or lessening competition by adopting Preventing or lessening competition by adopting

unfair methodsunfair methods

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Provisions of Section 31 of MRTPProvisions of Section 31 of MRTP

• Government may order an enquiry by MRTP Government may order an enquiry by MRTP Commission; and take any of these actions if Commission; and take any of these actions if needed:needed:

• Regulate the production and fixing the terms of sale Regulate the production and fixing the terms of sale (including sale)(including sale)

• Prohibiting any action that restricts competition; andProhibiting any action that restricts competition; and

• Fixing standards for production of goodsFixing standards for production of goods

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Restrictive Trade Practices (RTPs)Restrictive Trade Practices (RTPs)

According to Section 2(0) of MRTP ActAccording to Section 2(0) of MRTP Act

““Restrictive Trade Practice is an act which has the Restrictive Trade Practice is an act which has the effect, actual or probable of restricting, lessening or effect, actual or probable of restricting, lessening or destroyingdestroying competition.competition. Such trade practices may Such trade practices may tend to obstruct the flow of production or to bring tend to obstruct the flow of production or to bring about manipulation of prices or conditions of delivery about manipulation of prices or conditions of delivery etc to the common detriment” etc to the common detriment”

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Major RTPsMajor RTPs (Sec.33, MRTP Act)(Sec.33, MRTP Act)

• Refusal to deal with persons or class of personsRefusal to deal with persons or class of persons• Tie-in sale or full line forcingTie-in sale or full line forcing• Exclusive dealing agreementExclusive dealing agreement• Collective price fixation and tenderingCollective price fixation and tendering• Discriminatory dealingsDiscriminatory dealings• Re-sale price maintenanceRe-sale price maintenance• Restriction on output or supply of goodsRestriction on output or supply of goods• Control of manufacturing processControl of manufacturing process• BoycottBoycott• Price control arrangementsPrice control arrangements• Any other practice recognized as RTP by Govt.Any other practice recognized as RTP by Govt.• Residual RTPResidual RTP

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Regulation of RTPSRegulation of RTPS

Enquiry by MRTP Commission u/s 37 of Act and Enquiry by MRTP Commission u/s 37 of Act and Commission may issueCommission may issue

• Cease and desist orderCease and desist order

• Any agreement allowing RTP shall stand as voidAny agreement allowing RTP shall stand as void

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UNFAIR TRADE PRACTICESUNFAIR TRADE PRACTICES

““An Unfair Trade Practice is an act which for the An Unfair Trade Practice is an act which for the purpose of promoting the sale, use or supply of any purpose of promoting the sale, use or supply of any goods or the provision of any services, adopts one or goods or the provision of any services, adopts one or more unfair trade practices and thereby causes loss or more unfair trade practices and thereby causes loss or injury to the consumers of such goods or services, injury to the consumers of such goods or services, whether by whether by eliminating or restricting competitioneliminating or restricting competition or or otherwise”otherwise”

Included under the amendment of 1984 (August1, 1984) the major Included under the amendment of 1984 (August1, 1984) the major provisions with regard to UTPs are contained in sections 36A,B,C,D,E provisions with regard to UTPs are contained in sections 36A,B,C,D,E and 12A,B,C and 14 and 61 of the Act.and 12A,B,C and 14 and 61 of the Act.

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Major UTPsMajor UTPs(u/s 36A (1to5)of MRTP Act)(u/s 36A (1to5)of MRTP Act)

• Misleading advertisement or false representationMisleading advertisement or false representation

• Advertisement of bargain priceAdvertisement of bargain price

• Offering of pseudo gifts or prizes Offering of pseudo gifts or prizes

• Supply of unsafe or hazardous products; andSupply of unsafe or hazardous products; and

• Hoarding or destroying of goods, or refusal to sell Hoarding or destroying of goods, or refusal to sell goods, resulting in or expecting a price increasegoods, resulting in or expecting a price increase

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Regulation of UTPsRegulation of UTPs

The MRTP commission may enquire into any UTP:The MRTP commission may enquire into any UTP:

• Upon the complaint of any trade or consumer association with Upon the complaint of any trade or consumer association with a membership of 25 or morea membership of 25 or more

• Upon a reference made by State or Central Govt.Upon a reference made by State or Central Govt.• Upon its own knowledge or InformationUpon its own knowledge or Information• Any member of the public (Amendment of 1991)Any member of the public (Amendment of 1991)

If the UTP is proved Commission may direct:If the UTP is proved Commission may direct:

• Discontinuation of services and non-repetitionDiscontinuation of services and non-repetition• Any agreement relating to such UTP will be voidAny agreement relating to such UTP will be void

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Competition PolicyCompetition Policy

““Competition policy refers to the Government Competition policy refers to the Government policy designed to ensure contestability and fair policy designed to ensure contestability and fair competition by removing/preventing factors and competition by removing/preventing factors and forces that tend to distort fair competition”forces that tend to distort fair competition”

On a broad note, a well designed competition On a broad note, a well designed competition policy should govern policies relating to policy should govern policies relating to globalization, liberalization and de-regulation as globalization, liberalization and de-regulation as may have an impact on competitionmay have an impact on competition

““Competition policy can be regarded as a genus, Competition policy can be regarded as a genus, of which competition law is a specie” of which competition law is a specie”

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“The main objective of competition laws is to preserve and promote competition as a means to ensure the efficient allocation of resources in an economy, resulting in the best possible choice of quality, the lowest prices and adequate supplies for consumers”

- UNCTAD Report

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Pre-requisites of Competition policyPre-requisites of Competition policy

• All trade policies should be open, non-All trade policies should be open, non-discriminatory and rule bound and fall within the discriminatory and rule bound and fall within the contours of competition principlescontours of competition principles

• All physical and fiscal control on movement of All physical and fiscal control on movement of goods throughout the country should be abolishedgoods throughout the country should be abolished

• The state monopolies, Government procurement The state monopolies, Government procurement and foreign companies should be subject to and foreign companies should be subject to competition law.competition law.

• All the consumers should be covered under the All the consumers should be covered under the lawlaw

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Pre-requisites…Pre-requisites…

• All decisions of regulatory Authorities can All decisions of regulatory Authorities can be examined under the touchstone of be examined under the touchstone of competition lawcompetition law

• Bodies administering the various Bodies administering the various professions should use their autonomy and professions should use their autonomy and privileges to regulate the professionsprivileges to regulate the professions

• Quality and safety standards should not be Quality and safety standards should not be designed to prevent market access.designed to prevent market access.

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Contours of Competition Policy and LawContours of Competition Policy and Law

• Agreement among enterprisesAgreement among enterprises

• Abuse of dominanceAbuse of dominance

• Mergers or Combinations among enterprisesMergers or Combinations among enterprises

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Selected Restrictive Business Practices Selected Restrictive Business Practices addressed by Competition Lawaddressed by Competition Law

• Practices undertaken by single firm ( In Dominant Practices undertaken by single firm ( In Dominant position)position)

• Anticompetitive mergers and acquisitionsAnticompetitive mergers and acquisitions

• Horizontal RestraintsHorizontal Restraints

• Vertical RestraintsVertical Restraints

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Horizontal RestraintsHorizontal Restraints

• Price fixingPrice fixing

• Restraint of outputRestraint of output

• Market allocationMarket allocation

• Exclusionary practicesExclusionary practices

• Collusive tenderingCollusive tendering

• Conscious parallelismConscious parallelism

• Other restraintsOther restraints

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Vertical RestraintsVertical Restraints

• Exclusive dealingExclusive dealing• Reciprocal exclusivityReciprocal exclusivity• Refusal to dealRefusal to deal• Resale price maintenanceResale price maintenance• Territorial restraintsTerritorial restraints• Discriminatory pricingDiscriminatory pricing• Predatory pricingPredatory pricing• Premium offers or loyalty rebatesPremium offers or loyalty rebates• Tied sellingTied selling• Full-line forcingFull-line forcing• Transfer pricingTransfer pricing

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Competition Act, 2002Competition Act, 2002

With coming into effect of the Competition Act, 2002, With coming into effect of the Competition Act, 2002, the MRTP Act 1969 stands repealed and MRTP the MRTP Act 1969 stands repealed and MRTP Commission dissolved. MRTP Commission has been Commission dissolved. MRTP Commission has been replaced by Competition commission.replaced by Competition commission.

Competition Commission-FunctionsCompetition Commission-Functions

• Eliminate practices having adverse impact on competitionEliminate practices having adverse impact on competition• Promote and sustain competitionPromote and sustain competition• Protect interests of consumersProtect interests of consumers• Ensure freedom of trade carried on by all participants, in Ensure freedom of trade carried on by all participants, in

markets in Indiamarkets in India

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Why Competition Law?

• Market economy can suffer from market failures/ distortions, leading to adverse effects on economy and consumers;

• This necessitates a law and an authority to check against such practices;

• Consequently, about 100 countries have enacted modern competition laws;

• India too enacted new Competition Act,2002 as part of second generation economic reforms.

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Anti-Competitive Agreement Anti-Competitive Agreement Sec.3(3)Sec.3(3)

Any collusive agreement which:Any collusive agreement which:

(a)(a) Directly or indirectly determines the Directly or indirectly determines the purchase or sale prices;purchase or sale prices;

(b)(b) Limits or controls, production, supply, Limits or controls, production, supply, market, technical development, investment market, technical development, investment or provision of services;or provision of services;

(c)(c) Shares the market or sources of production;Shares the market or sources of production;

(d)(d) Directly or indirectly results in bid rigging; Directly or indirectly results in bid rigging;

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Any agreement which causes:Any agreement which causes:

• Tie-in agreementTie-in agreement • Exclusive supply agreementExclusive supply agreement • Exclusive distribution agreementExclusive distribution agreement

• Refusal to dealRefusal to deal • Resale price maintenanceResale price maintenance

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Abuse of Dominant Position Abuse of Dominant Position Sec.4Sec.4

Dominant position means position of Dominant position means position of strength enjoyed by an organization in the strength enjoyed by an organization in the relevant market in India which enables it to:relevant market in India which enables it to:

(i) Operate independently of competitive forces (i) Operate independently of competitive forces prevailing in the relevant market; orprevailing in the relevant market; or

(ii) Affect its competitors or consumers or the (ii) Affect its competitors or consumers or the relevant market in its favorrelevant market in its favor

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Factors Considered in Determining Factors Considered in Determining Adverse effect of an AgreementAdverse effect of an Agreement

• Creation of entry barrierCreation of entry barrier• Driving existing competitors out of marketDriving existing competitors out of market• Foreclosure of competition by hindering Foreclosure of competition by hindering

entry into marketentry into market• Denial of benefits to consumersDenial of benefits to consumers• Artificial improvement in production or Artificial improvement in production or

distribution of goods or provision of servicesdistribution of goods or provision of services• Undesirable promotion of technical, Undesirable promotion of technical,

scientific and economic development by scientific and economic development by means of production or distribution of goods means of production or distribution of goods or provision of servicesor provision of services

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Factors Considered in Determining Factors Considered in Determining Dominant PositionDominant Position

• Market shareMarket share• Size and resources of enterpriseSize and resources of enterprise• Size and importance of competitorsSize and importance of competitors• Economic power of the enterpriseEconomic power of the enterprise• Vertical integration of an organizationVertical integration of an organization• Dependence of consumers on enterpriseDependence of consumers on enterprise• Monopoly due to any statute?Monopoly due to any statute?• Entry barriersEntry barriers• Countervailing buying power Countervailing buying power • Market structure and size of marketMarket structure and size of market• Social obligation and social costsSocial obligation and social costs• Relative advantageRelative advantage

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Regulation of Anti-competitive Regulation of Anti-competitive AgreementAgreement

Competition Commission may :Competition Commission may :

• Issue directions for discontinuation of abuse Issue directions for discontinuation of abuse of dominant positionof dominant position

• Imposition of penalty Imposition of penalty (not more than 10% of (not more than 10% of average turn-over for last three years)average turn-over for last three years)

• Award compensation to affected partiesAward compensation to affected parties• Direct for the modification of agreementDirect for the modification of agreement• Direction for compliance to commission’s Direction for compliance to commission’s

ordersorders• Recommendations for division of organizationRecommendations for division of organization• Pass any such order as it may deem fitPass any such order as it may deem fit

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Division of organization (Sec. 28) Division of organization (Sec. 28)

• Transfer or vesting of property, rights, liabilities or Transfer or vesting of property, rights, liabilities or obligationsobligations

• Adjustment of contractsAdjustment of contracts• Creation, allotment, surrender or cancellation of Creation, allotment, surrender or cancellation of

any shares, stocks or securitiesany shares, stocks or securities• The payment of compensation to any person or The payment of compensation to any person or

organization who suffered lossorganization who suffered loss• Formation or binding up of an enterpriseFormation or binding up of an enterprise• Amendment of M/A or A/A or any other document Amendment of M/A or A/A or any other document

of the companyof the company• Any other matterAny other matter

Exemption by Centre Government Exemption by Centre Government

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Abuse of Dominance• Not dominance, but only its abuse is illegal • Dominance not based on arithmetical figure, but

on factors listed in Act• Acts deemed abuses are:• Unfair or discriminatory pricing (including

predatory pricing) • Limiting production or technical development• Denial of market access• Conclusion of contracts subject to supplementary

obligations• Use of dominant position in one market to enter

into or protect the other market

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Indian ScenarioIndian Scenario

• In India-suspected cases of abuse of dominance; but no known case of effective action;

• In India-cartels suspected in several industries, but no effective action so far.

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Competition Commission –Competition Commission –Rationale & RoleRationale & Role

"The Competition Commission is not an in-"The Competition Commission is not an in-market regulator but sits off-market, while market regulator but sits off-market, while keeping a watchful eye on the goings-on in keeping a watchful eye on the goings-on in case there is any anti-competitive activity". case there is any anti-competitive activity". "The Competition Commission does not "The Competition Commission does not intervene intervene ex-anteex-ante in business decisions and it in business decisions and it has no power to direct enterprises about how has no power to direct enterprises about how they should conduct their business or set they should conduct their business or set prices. Its role is mainly prices. Its role is mainly ex-postex-post; if an ; if an enterprise violates any provision of the enterprise violates any provision of the Competition Act, the Commission has the Competition Act, the Commission has the power to step in and take remedial action." power to step in and take remedial action."

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CCI -RationaleCCI -Rationale A catchy and sporty analogy, that is, to emphatically A catchy and sporty analogy, that is, to emphatically

bring out the essence of the Competition bring out the essence of the Competition Commission's work. For, the Commission's role is Commission's work. For, the Commission's role is differentdifferent from that of a sector regulator like the from that of a sector regulator like the SEBI (Securities and Exchange Board of India), the SEBI (Securities and Exchange Board of India), the TRAI (Telecom Regulatory Authority of India), or the TRAI (Telecom Regulatory Authority of India), or the Electricity Regulatory Commission.Electricity Regulatory Commission.

Mr Vinod Kumar Dhall,Mr Vinod Kumar Dhall,Mmeber, CCIMmeber, CCI

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CCI -RationaleCCI -Rationale "This is World Cup season! Think of cricket”. "This is World Cup season! Think of cricket”.

"The teams and players are free to compete "The teams and players are free to compete aggressively and play hard in any manner they aggressively and play hard in any manner they please. No umpire can dictate his tactics or please. No umpire can dictate his tactics or strategies. But no team can resort to unfair or strategies. But no team can resort to unfair or prohibited means like say drugs, and if any prohibited means like say drugs, and if any declared rule of the game is breached, the declared rule of the game is breached, the umpire has the right to intervene, and in fact umpire has the right to intervene, and in fact must do so to maintain fair play and healthy must do so to maintain fair play and healthy competition, where the winner is the best competition, where the winner is the best team, not the roughest or trickiest team!" team, not the roughest or trickiest team!"

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CCI -RationaleCCI -Rationale• When the Competition Bill was being first considered When the Competition Bill was being first considered

in Parliament in 2002, there was in Parliament in 2002, there was mighty opposition mighty opposition from the business communityfrom the business community. "It apprehended that . "It apprehended that this heralded yet another inspectorate with the this heralded yet another inspectorate with the power to intervene in business processes and power to intervene in business processes and decisions." decisions."

• Four years laterFour years later, attitudes had changed. During , attitudes had changed. During 2006, when the Parliamentary Standing Committee 2006, when the Parliamentary Standing Committee was considering the Competition (Amendment) Bill, was considering the Competition (Amendment) Bill, there was little or no opposition from the business there was little or no opposition from the business community to the basic premise of having a community to the basic premise of having a Competition Commission. Competition Commission.

• "A welcome shift in perception”. "A welcome shift in perception”.

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CCI -RationaleCCI -Rationale Though the Competition Commission is mostly driven Though the Competition Commission is mostly driven

by complaints from aggrieved parties, there is by complaints from aggrieved parties, there is nothing to prevent the Commission from taking nothing to prevent the Commission from taking suo-suo-motomoto notice of violations, one learns. "Only in the notice of violations, one learns. "Only in the case of mergers, the Commission has an ex-ante role case of mergers, the Commission has an ex-ante role and it could stop a merger, if the deal is likely to and it could stop a merger, if the deal is likely to have an appreciable adverse effect on competition in have an appreciable adverse effect on competition in the relevant market." the relevant market."

Therefore, when we have the new Competition law Therefore, when we have the new Competition law in place, the M&A (merger and acquisition) scenario in place, the M&A (merger and acquisition) scenario may perceive the impact. Also, price for violations may perceive the impact. Also, price for violations can be stiff and deterrent in nature, it is anticipated.can be stiff and deterrent in nature, it is anticipated.

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CCI -RationaleCCI -Rationale “ “Finally, who would say that the Finally, who would say that the World Cup needs no umpire, and World Cup needs no umpire, and

cricket would be better off without cricket would be better off without one?" Similarly, who would say that one?" Similarly, who would say that the market needs no Competition the market needs no Competition

Commission?Commission?

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International Cooperation

• For discharging its duties/functions, CCI can enter into memorandum/arrangement with any agency of any foreign country

• Such arrangements important for inquiries against overseas/cross-border violations

• International cooperation and effects doctrine mutually complementary

• Such agreements exist between several competition authorities

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Competition Advocacy

• Various competition authorities have undertaken sustained advocacy programmes eg. UK, Australia, Canada;

• Awareness amongst stakeholders will promote compliance; less intervention;

• Being complex economic law, structured dissemination necessary;

• Advocacy with Central/State Governments, regulators and statutory authorities to promote pro-competition laws policies, practices;

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Some Important Cases(Anti-competitive

Agreements)•Vitamin Cartel Case

The US anti - trust authorities have unveiled an international price fixingconspiracy involving several leading and sophisticated pharmaceutical manufacturers of the world. These companies lead a global conspiracy to

- fix prices of Vitamins, - allocate markets, - supply contracts and sales volume,- bid - rigging at various times.

Majority of the colluding firms admitted their involvement in the carteland agreed to pay US$ 500 mn fine.

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Some Important CasesCombinations (Mergers and Acquisitions)

• Proposed combination of Boeing and McDonnel - Douglas relating to aircraft industry was allowed

by US Anti-trust Authorities. Combination of General Electric and Honeywell relating to Jet Engines was allowed by US Anti-

trust Authorities.

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Mergers and Acquisitions

• Commission to regulate “Combinations”, i.e., large mergers, acquisitions, etc. likely to have appreciable adverse effect on competition.

• Threshold:

• For single enterprise

– Assets > Rs.1000 crores – Turnover > Rs.3000 crores

• For group of enterprises – Assets > Rs.4000 crores – Turnover > Rs.12000 crores

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Hike in the Steel Prices –Hike in the Steel Prices –Why?Why?

• Hike in input costs besides increase in demandHike in input costs besides increase in demand

• Assocham in its study, 'The Steel Surge’ , found that Assocham in its study, 'The Steel Surge’ , found that increase in freight costs by 288 per cent over the last increase in freight costs by 288 per cent over the last couple of years have significantly contributed to the couple of years have significantly contributed to the rise in steel prices. rise in steel prices.

• 3.1 to 3.2 tonnes of raw materials are required to 3.1 to 3.2 tonnes of raw materials are required to produce a tonne of steel. Domestic prices of hot produce a tonne of steel. Domestic prices of hot rolled coils are hovering at Rs 28,500 per tonne, rolled coils are hovering at Rs 28,500 per tonne, excluding freight, excise and other duties. So the rise excluding freight, excise and other duties. So the rise in steel prices can be attributed to a hike in input in steel prices can be attributed to a hike in input costs costs

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Hike in the Steel PricesHike in the Steel Prices• In January, this year iron ore prices shot up by 100 per In January, this year iron ore prices shot up by 100 per

cent over March 2003. NMDC, the country's largest cent over March 2003. NMDC, the country's largest miner and ore supplier hiked ore prices by 50 per cent miner and ore supplier hiked ore prices by 50 per cent to Rs 1,430 per tonne from Rs 960 per tonne to realign to Rs 1,430 per tonne from Rs 960 per tonne to realign its prices with the benchmark international prices its prices with the benchmark international prices which too were recently hiked by 71.5 per cent. which too were recently hiked by 71.5 per cent. Besides, 60 per cent of coke is imported owing to the Besides, 60 per cent of coke is imported owing to the fact that domestic coke is of high ash content.fact that domestic coke is of high ash content.

• It accounted for over 55 per cent of the steel produced It accounted for over 55 per cent of the steel produced through blast furnaces. The average consumption of through blast furnaces. The average consumption of coking coal is Rs 542 kg per tonne of hot metal. coking coal is Rs 542 kg per tonne of hot metal. Similarly, price of coke have also shot up by 111 per Similarly, price of coke have also shot up by 111 per cent during the past two years, the study said.cent during the past two years, the study said.

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Steel Prices……….Steel Prices……….• While such an increase in iron ore prices would lead to While such an increase in iron ore prices would lead to

corresponding rise in the price of steel by $16 to 24  per corresponding rise in the price of steel by $16 to 24  per tonne of steel, rise in coking coal prices for the same year tonne of steel, rise in coking coal prices for the same year would result in a hike of $52 to 67 per tonne of steel.would result in a hike of $52 to 67 per tonne of steel.

• impacts of both these cases excluded the impact of ocean impacts of both these cases excluded the impact of ocean freight, which is likely to remain strong in a demanding freight, which is likely to remain strong in a demanding market, the study said.market, the study said.

• The demand for steel was likely to grow by 7 to 8 per cent The demand for steel was likely to grow by 7 to 8 per cent over the next ten years. Besides demand from China, new over the next ten years. Besides demand from China, new European Union nations too are keen to improve their European Union nations too are keen to improve their infrastructural facilities leading to a corresponding infrastructural facilities leading to a corresponding growth in demand for steel. growth in demand for steel.

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Steel Prices……….Steel Prices……….• Asia, particularly the Gulf nations, Thailand and South Korea Asia, particularly the Gulf nations, Thailand and South Korea

have also grown remarkably. When the world demand grew by 4 have also grown remarkably. When the world demand grew by 4 to 4.5 per cent in 2003, Asia had cumulatively grown by more to 4.5 per cent in 2003, Asia had cumulatively grown by more than 7 per cent. Hence the demand for steel is likely to grow by 7 than 7 per cent. Hence the demand for steel is likely to grow by 7 to 8 per cent, it said.to 8 per cent, it said.

• The demand for steel is also rising in India due to the The demand for steel is also rising in India due to the development of infrastructure and growth in housing and development of infrastructure and growth in housing and construction sectors. Besides, the automobile sector grew at a construction sectors. Besides, the automobile sector grew at a rate of 16 per cent during April to February 2005 as compared to rate of 16 per cent during April to February 2005 as compared to the corresponding period the previous year.the corresponding period the previous year.

• White goods sector was also depicting growth. All these White goods sector was also depicting growth. All these factors have led to an increase in the steel prices, the factors have led to an increase in the steel prices, the study pointed out. study pointed out.