New Delhi, Aug 12 (IANS): The government on Wednesday increased the import duty on select steel products by 2.5 percent, making the second such hike within two months.

Finance Minister Arun Jaitley tabled a notification to this effect in both houses of parliament.

Following a steady upturn in cheap imports from China, the government in June increased import duty on steel products by 2.5 percent.

The import duty on semi ingots product will now be 10 percent, from the earlier 7.5 percent. The duty on stainless steel long products, alloy steel long products, non-alloy long products and alloy steel flat products have similarly been raised to 10 percent.

Non-alloy flat products and specified alloy steel products will now attract import duty of 12.5 percent.

There is no change in the duty on stainless steel flat products, currently at 7.5 percent.

The Indian industry has been demanding higher import duties, while the official measure has been provoked by fears that the double devaluation of the Chinese yuan this week will lead to greater dumping of cheap Chinese steel.

Bank of America-Merrill Lynch (BofA-ML) said last month that small steel plants - below 0.5 million tonnes capacity - and unorganized sector steel units were closing down.

The report said: "Their market share is grabbed by large steel units and is reflected in increased long steel demand as reported by the Joint Plant Committee (JPC).

"Small long steel units cannot survive as their costs are higher than sales price by 7 percent.

"The status of tier-II flat steel mills and the established fact that cheap imports are causing price falls in India may lead to further import duty hike," the report said.