Further Cut in Steel Import Duty under Consideration in India
According to reports in media, Indian government has proposed to slash import duties on steel items further bringing it to zero or near zero levels to
According to reports in media, Indian government has proposed to slash import duties on steel items further bringing it to zero or near zero levels to provide relief to MSMEs, which have been hit hard by the high cost of raw materials amidst the raging pandemic. It is expected that duty cuts in steel will be announced shortly by the DGFT after getting formal nod from the finance ministry. Government sources said that “"Steel prices continue to remain firm and have also risen further in recent months. It is making operation of several user industries difficult especially in a market disrupted by the pandemic. Cut in import duty will help tame steel prices as the global prices of steel in certain markets are still lower than domestic prices. The measure will also help supply lines of steel if there is any shortage in domestic steel production due to use of oxygen by steel makers for Covid relief.”
In budget 2021-22, India’s Finance Minister Ms Nirmala Sitharaman had reduced the anti dumping duty and countervailing duty on certain steel products while reducing customs duty uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels from 10-12.5% levels earlier. She also brought down import duty to nil on steel scrap to support user industries hit hard by sharp rise in steel prices.
With demand for steel remaining firm and China cutting export incentives to steel makers to support domestic needs, Indian steel prices are expected to move up further. Moreover, it is quite unlikely that proposed reduction in import duty would help steel users as global steel exports prices are red hot and steel imports seem unviable. The only way to improve domestic availability is to tame exports by imposing 20-25% export duty