"We are still investigating and if it is proven that manipulations have occurred the policy would be corrected," the director general of basic manufacturing industries, Panggah Susanto, said when contacted over the issue here on Sunday.
He said the ministry of industrial affairs has received a lot of complaints from domestic steel producers with regard to a lot of imported alloy steel products in the country.
The Indonesian government imposes a zero percent import duty on iron and steel products that contain alloy.
Importers are suspected to have manipulated the policy by stating that the iron and steel products they import contain alloy to avoid paying the import duty.
The government will check alloy content in imported steel products in cooperation with Sucofindo and the customs office, Panggah said.
He said in certain cases alloy had only been added to the products just to avoid the duty-free facility.
Panggah said that investigation would be carried out immediately so that domestic producers would not be hurt for long.
The Indonesian government has so far imposed an anti-dumping policy to safeguard national steel industries due to increasing flows of imported steel products especially from China, he said.
The executive director of the Indonesia Iron and Steel Industry Association (IISIA), Edward R Pinem, said earlier that alloy steel imports had increased drastically every year while the use of alloy steel products in the country was not much.
The amount must not have reached hundred thousand tons, he added.
In view of that he suspected that a lot of importers have misused the facility and put alloy in their steel products just to make them able to declare them as steel alloy products to avoid the import duty.
Edward said the increasing flows of alloy steel products have hurt domestic carbon steel market.
At present there are around 20 producers of wire rod, iron profiles and iron steel in addition to companies producing hot rolled steel, cold rolled steel.