SteelMin pushes for duty cuts to help industry

Responding to requests from steelmakers,who have been seeking further protection from cheap imports at a time of economic downturn....

Responding to requests from steelmakers,who have been seeking further protection from cheap imports at a time of economic downturn,the steel ministry is understood to have recommended enhancing import duty on flat products to 10 per cent and increasing the duty on iron ore export to 15 per cent.

In a slew of proposals to the government for the coming Budget,the ministry argued that there was considerable evidence of dumping from CIS nations particularly Russia,Ukraine and Poland. Our analysis shows that at current international freight On board (FOB) prices in CIS countries with 5 per cent import duty,landed cost of imports in respect to most steel items is below domestic prices, ministry sources told The Indian Express. Therefore,the ministry has recommended enhancing import duty on flat products (HR coils) by 5 per cent to 10 per cent. In addition,it has also suggested hiking import duty on structural steel and reinforcement bars.

Observing that ore exports grew to a whopping 52.62 million tonne (MT) between December 2008 and March 2009,as against 46 MT in the corresponding period last fiscal when export duty on ore fines was removed,the ministry argued for disincetivising ore export through fiscal measures. We recommended that to conserve iron ore for value-addition by (the) domestic steel industry,a duty of 15 per cent may be levied on exports of all varieties of iron ore. This would also help garner additional revenue of about Rs 4,543 crore, the source said. The ministry also suggested imposition of 15 per cent ad-valorem export duty on chrome ore and chrome ore concentrates. Advocating the cessation of the 5 per cent-export duty on iron ore pellets,ostensibly to bail out its ailing Kudremukh Iron Ore Company Limited,the ministry pointed out that ore pellets have a distinct identity. The ministry also pitched for abolishing customs duty on shipbreaking for the benefit of the low-cost secondary sector.