Indian government has reduced import duty on input materials & imposed export duties on finished steel items to increase domestic availability & control steel prices in India. The government issued 4 Custom notifications on 21 May 2022 to make these changes with effect from 22 May 2022 Reduction in Import DutyAnthracite, PCI, Coking Coal - 2.5% to 0%Met Coke - 5% to 0%Ferronickel - 2.5% to 0% Imposition of Export DutyIron Ore - 50%Iron Ore Pellets - 45%Pig Iron 7201, HR 7208, CR 7209, Coated 7210, Bars & Rods 7213 & 7214 -15%SS Flat Products 7219, SS Long Products 7222, Alloy Bars & Rods 7227 - 15% Indian steelmakers body the Indian Steel Association said “The industry welcomes the removal of import duty on coking coal and few other input raw materials for the industry. However, imposition of export duty on steel will only send a negative signal to investors in the steel sector and will adversely impact the sector’s capacity utilization. India has been increasing its engineering and steel exports over the last two years and has the potential to become part of a larger global supply chain. India may lose the export opportunities now and this decision may also impact the overall economic activity in the country. Also, the imposition of export duty will help other countries to increase their share in the global market, which India will vacate. Rebuilding the lost ground may take a very long time, as the supply chain will be disrupted, while India’s credibility as a reliable exporter will take a hit. Also steel industry in India has made the largest investment commitments ranging from 36-40 % of total investments committed by the entire manufacturing sector. These investments in capacity building are needed to achieve the Atmanirbhar Bharat Vision. In light of these decision new capacities creation may get impacted as they would be seen as uneconomical thus affecting the much-awaited investment against PLI scheme for speciality steel. Besides, it may have a major impact on the entire supply chain in the long term. The economic activity of a few states dependent on minerals and steel will be further hit. These measures need to be deliberated and then a calibrated approach may be taken. The steel industry continues to remain committed to nation-building.” Industry body FICCI has requested the government to give the domestic steel industry three months to clear their orders. FICCI Steel Committee co-chair & JSPL MD Mr VR Sharma said “there are 2 million tonnes of steel orders in the pipeline where either Letter of Credits is established or the sales contracts are signed. Supply of such orders at the given rate will be affected due to the duty imposed. I suggest at least three months should be given to taper off orders and to supply the orders taken. A three-month time will provide relief to the customers who are not at fault.” Federation of Indian Export Organizations President Mr A Sakthivel said “These measures will bring down the domestic prices of key inputs thereby softening inflation. This will also add to the competitiveness of the manufacturing and export sector and will further push value-added exports from the country. These proactive measures will also ease the logistics pressure and bring down the freight bill of the country as in some cases the same raw material was being exported from the country and subsequently being imported by the downstream users.” CREDAI President Mr Harsh Vardhan Patodia said “We are pleased with the finance minister and the government’s intervention to control the rise in the cost of raw materials and in turn control inflation as the Indian economy had stayed resilient while grappling with the strains of cost inflation of raw material prices but had disrupted the growth of the real estate sector in the last 18 months. However, a momentous move by the government to reduce import duties on steel products should provide a sigh of relief to all stakeholders. Additionally, a reduction in import duty of iron ore and steel intermediates will further bolster the availability of raw materials domestically, cool off the prices of steel products, and help tide the rise in prices of projects, strengthening consumer sentiment.”
Indian government has reduced import duty on input materials & imposed export duties on finished steel items to increase domestic availability & control steel prices in India. The government issued 4 Custom notifications on 21 May 2022 to make these changes with effect from 22 May 2022 Reduction in Import DutyAnthracite, PCI, Coking Coal - 2.5% to 0%Met Coke - 5% to 0%Ferronickel - 2.5% to 0% Imposition of Export DutyIron Ore - 50%Iron Ore Pellets - 45%Pig Iron 7201, HR 7208, CR 7209, Coated 7210, Bars & Rods 7213 & 7214 -15%SS Flat Products 7219, SS Long Products 7222, Alloy Bars & Rods 7227 - 15% Indian steelmakers body the Indian Steel Association said “The industry welcomes the removal of import duty on coking coal and few other input raw materials for the industry. However, imposition of export duty on steel will only send a negative signal to investors in the steel sector and will adversely impact the sector’s capacity utilization. India has been increasing its engineering and steel exports over the last two years and has the potential to become part of a larger global supply chain. India may lose the export opportunities now and this decision may also impact the overall economic activity in the country. Also, the imposition of export duty will help other countries to increase their share in the global market, which India will vacate. Rebuilding the lost ground may take a very long time, as the supply chain will be disrupted, while India’s credibility as a reliable exporter will take a hit. Also steel industry in India has made the largest investment commitments ranging from 36-40 % of total investments committed by the entire manufacturing sector. These investments in capacity building are needed to achieve the Atmanirbhar Bharat Vision. In light of these decision new capacities creation may get impacted as they would be seen as uneconomical thus affecting the much-awaited investment against PLI scheme for speciality steel. Besides, it may have a major impact on the entire supply chain in the long term. The economic activity of a few states dependent on minerals and steel will be further hit. These measures need to be deliberated and then a calibrated approach may be taken. The steel industry continues to remain committed to nation-building.” Industry body FICCI has requested the government to give the domestic steel industry three months to clear their orders. FICCI Steel Committee co-chair & JSPL MD Mr VR Sharma said “there are 2 million tonnes of steel orders in the pipeline where either Letter of Credits is established or the sales contracts are signed. Supply of such orders at the given rate will be affected due to the duty imposed. I suggest at least three months should be given to taper off orders and to supply the orders taken. A three-month time will provide relief to the customers who are not at fault.” Federation of Indian Export Organizations President Mr A Sakthivel said “These measures will bring down the domestic prices of key inputs thereby softening inflation. This will also add to the competitiveness of the manufacturing and export sector and will further push value-added exports from the country. These proactive measures will also ease the logistics pressure and bring down the freight bill of the country as in some cases the same raw material was being exported from the country and subsequently being imported by the downstream users.” CREDAI President Mr Harsh Vardhan Patodia said “We are pleased with the finance minister and the government’s intervention to control the rise in the cost of raw materials and in turn control inflation as the Indian economy had stayed resilient while grappling with the strains of cost inflation of raw material prices but had disrupted the growth of the real estate sector in the last 18 months. However, a momentous move by the government to reduce import duties on steel products should provide a sigh of relief to all stakeholders. Additionally, a reduction in import duty of iron ore and steel intermediates will further bolster the availability of raw materials domestically, cool off the prices of steel products, and help tide the rise in prices of projects, strengthening consumer sentiment.”
