May 13, 2021
3 mins read

Govt may slash import duty on steel to near-zero levels

Also, lower import duties would help maintain supply lines that have been affected with several domestic steel companies reducing steel production to divert medical grade oxygen for Covid-19 relief measures…reports Asian Lite News.

The 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.

Top government sources said that a decision had been taken to review duties on steel products and reduce it or withdraw it completely on few items to help the user industry hit hard by rising price of the metal in the domestic market.

Also, lower import duties would help maintain supply lines that have been affected with several domestic steel companies reducing steel production to divert medical grade oxygen for Covid-19 relief measures.

In budget 2021-22, Finance Minister Nirmala Sitharaman had revoked the anti-dumping duty (ADD) and countervailing duty (CVD) on certain steel products while reducing customs duty uniformly to 7.5 percent on semis, flat, and long products of non-alloy, alloy, and stainless steels from 10-12.5 percent 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.

These duties may now be withdrawn or slashed further.

“Steel prices continue to remain firm and have also risen further in recent months. It is making operation of several user industries difficult specially 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 another input oxygen by steel makers for Covid relief,” said the official source quoted earlier.

It is expected that duty cuts in steel will be announced shortly by the DGFT after getting formal nod from the finance ministry. A call has to be taken whether to bring down duty levels largely at 7.5 per cent to 2.5 per cent or withdraw it completely for the time being.

Domestic hot-rolled coil (HRC) prices rallied to a multi-year high of Rs 56,000 per tonne in February from Rs 39,200 per tonne in March 2020 as demand improved amid iron-ore supply constraints and high global prices. This has further improved to over Rs 58,000 in April, a jump of over 50 per cent in last 13 months.

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. The cut in duty is expected to tame prices in the domestic market while providing competition to domestic steelmakers from traders who secure cheaper metal from abroad.

Steel producers asking anonymity said that the move to cut import duty would be detrimental to the interest of domestic steelmakers as it could flood the market with cheap and substandard steel being dumped into the country. They said that the steel market is giving indications that the domestic steel sector may turn profitable after a long interval. But duty cuts could change the cycle again.

In the current scenario of a moderation in demand in India due to the second wave of Covid-19 and consequent business lockdowns, Indian steel mills would be able to offload large steel volumes to export markets and still remain highly profitable, according to a recent report from ICRA.

But a cut in duty would squeeze margins and bring a lot of export destined products back into the domestic market.

ALSO READ-10-day lockdown in Telangana

READ MORE-Pak imposes 10-day nationwide lockdown

Previous Story

GMBHCA to host digital Baisakhi soon

Next Story

Ghulam Nabi Azad to chair Congress task force on Covid

Latest from Business

Microsoft Cuts Deep

The fresh job cuts come less than two months after Microsoft announced it was laying off more than 6,000 employees…reports Asian Lite News Microsoft is set to cut around 9,000 jobs —

Northeast Is Growth Engine

Scindia also provided updates on the government’s efforts to facilitate the entry of SpaceX’s Starlink service into India. “All due diligence from the Ministry’s side is complete Union Minister for Communications and

India to Empower Global South

India is emerging as a pivotal force in the global transition to clean energy, with Union Minister for New and Renewable Energy, Pralhad Joshi, asserting that the country is empowering the Global

Maruti’s Global Push Breaks Record

June shipments hit 37,842 units, signalling robust global demand Maruti Suzuki India recorded its highest-ever monthly exports in June, shipping 37,842 units and marking a new milestone that highlights the company’s expanding

India Bats for Fairer Global Finance: FM Sitharaman

FM Sitharaman stated that we believe that optimal regulation fosters innovation and stability….reports Asian Lite News India supports reforms to the international financial architecture to enhance inclusivity and equity, including Multilateral Development
Go toTop

Don't Miss

‘Jabs are working’ but lockdown easing in doubt

It is now the dominant type in circulation and surge

The dark face of Covid

Distressed parents of their only 25-year-old son, Santhosh Jena was