Veysel Yayan speaking about DİR Regulation: According to the results, taking further steps and maintaining the balance of foreign trade will be the main goal

With the new regulation made by the Ministry of Trade regarding the Inward Processing Regime (DİR), the durations of the Inward Processing Permit Certificate (DİİB) have been shortened, while a domestic supply condition of at least 25% was introduced for the production of products to be used in exports. Veysel Yayan, Secretary General of the Turkish Steel Producers Association, evaluated the impact of this regulation on the iron-steel sector for Demir Çelik Store. Yayan stated that further steps could be taken based on the results obtained from the implementation and emphasized that maintaining the balance of foreign trade in the Turkish iron-steel sector, as in the USA and EU, has emerged as a fundamental goal in the future process. We share the interview we conducted as Demir Çelik Store with you.

Can you explain the new regulation made by the Ministry of Trade regarding the Inward Processing Regime (DİR) to our readers in detail? Why was this regulation needed?

Turkey's import of steel products has shown significant increases since 2020. Imports from China increased approximately tenfold, reaching 3 million 739 thousand tons in 2024 from 395 thousand tons in 2020. A similar situation is observed in imports from countries such as Malaysia, South Korea, Vietnam, and Indonesia.

99.7% of our trade with Far Eastern countries is import, only 0.3% is export

99.7% of our trade with Far Eastern countries is import, only 0.3% is export. A similar picture is present in our foreign trade with China. It is not possible to sustain this unbalanced structure. The same situation is seen in total foreign trade with China, with 47 billion dollars of imports against only 3 billion dollars of exports, which is not sustainable. In 2025, a decrease in imports is expected due to the safeguard measure taken for wire rod in 2024 and the anti-dumping duties decided for hot flat products in October, but although there was a short initial decline, an upward trend reappeared from the second quarter of the year.

If measures are not taken, Turkey will become an open market

Since May, imports from China and Russia have exceeded 500 thousand tons per month. Similarly, imports from the Russian Federation have increased, rising by 72.7% in the first seven months of 2025. On the other hand, imports from India increased by 90% in the first 7 months of the year, with an increase rate of 579% in the last three months. Considering India's goals to increase its production and capacity in the coming years, the exponential increase in imports from the country is causing concerns.

It is seen that a large part of the total imports is realized within the scope of the Inward Processing Regime (DİR). 96.1% of imports from Russia; 80.5% of imports from China; and 83.5% of imports from India were realized within the scope of DİR. If the current trend continues, it is likely that imports from both Russia and China will exceed 5 million tons per country.

The Turkish steel sector can only use 61.8% of its 60 million ton capacity

In an environment where the Turkish steel sector can only use 61.8% of its 60 million ton capacity, this rapid increase in imports has created serious discomfort in the sector. This situation poses negativity not only for the steel sector but also for the country's economic balances and efforts to close the current account deficit.

"The economic management has determined that DİR has exceeded its initial target of supplying inputs not produced domestically; despite having sufficient capacity, it has encouraged a complete shift to imports due to cost concerns and has started taking measures to address this."

How will the new conditions that will come into effect with the regulation affect the Turkish steel sector?

In this context, on September 16, 2025, the Ministry of Trade; published a circular regarding Mining, Metal, and Forest products, mandating that 25% of exports be supplied domestically to reduce the imbalances caused by DİR. Especially in products where there is sufficient capacity, it will be understood from the implementation to what extent this rate will be sufficient to limit imports. However, at this point, the economic management has determined that DİR has exceeded its initial target of supplying inputs not produced domestically; despite having sufficient capacity, it has encouraged a complete shift to imports due to cost concerns and has started taking measures to address this. This situation is valid not only for the steel sector but for all sectors.

Our Ministry of Trade has demonstrated its determination to intervene in this negative picture in foreign trade. It is evaluated that further steps can be taken based on the results obtained from the implementation. As in the USA and EU, maintaining the balance of foreign trade has emerged as a fundamental goal in the future process. Establishing the current balance, reducing deficits, and possibly achieving a surplus is of vital importance for the Turkish economy. To achieve this goal, both the reduction of imports by organizations fulfilling export commitments within the scope of DİR and the introduction of products to be supplied domestically by manufacturing organizations are required. It is foreseen that the harmony to be achieved between producers and user sectors will yield positive results for the Turkish steel sector.

The sustainability of increasing imports every month is not possible

Of course, changing habits and adapting to new conditions will not be easy at first. However, the sustainability of increasing imports every month is also not possible. Saying "stop" at some point is the fundamental responsibility of economic management. As a sector, we see that a cautious step has been taken in this direction. After evaluating the results, it is considered that further measures can be taken and that these steps can be expanded to cover other sectors as well.

A permanent solution lies in establishing the infrastructure for balanced foreign trade with all countries

Another point to be considered here is the need for safeguard measures to be extended not only to low but also to high value-added products. The possibility of organizations consuming high value-added products turning abroad to be more profitable should also be considered; tax regulations encouraging domestic supply in these products should be implemented. The USA has taken such measures despite having a much lower foreign trade deficit than us. However, Turkey's foreign trade deficit with China alone is at a level 15 times higher. Therefore, no matter how correct the steps taken are, they may remain symbolic. A permanent solution lies in establishing the infrastructure for balanced foreign trade with all countries.

Is the regulation sufficient for the sector? Are new regulations needed to advance the sector's global competitiveness?

The economic management has been working on this issue for many years, and the views of producers and users, as well as public units, have been taken into account in the decision-making process. Therefore, this decision is a product of a common will that considers the high interests of our country and economy. Although it is understood that some organizations may experience adaptation problems initially, it is evaluated that a balanced structure can be established within reasonable periods. Therefore, instead of immediately opposing the decision theoretically, it is considered beneficial to explore the possibilities of adaptation.

In addition, not only the orientation of producer organizations to the domestic market but also the development of a new approach on the production side to enable them to find the products they are looking for, the production of products not available domestically, and the creation of a stronger domestic market are needed.

The efficient operation of capacities established with extraordinary resource allocations, obtaining profitability, and directing these profits to investments targeting the production of higher value-added products is only possible by limiting uncontrolled imports.

Our association evaluates that efforts in this direction are important for the future of both our steel sector and manufacturers/exporters using steel products, and welcomes the decisions taken on behalf of our sector. In this respect, we hope that the steps taken will be beneficial to the Turkish economy and the steel sector.

Source: Demir Çelik Store