NEW DELHI: The Steel Ministry has asked the Finance Ministry to scrap import duty on coking coal, as it is increasing the input cost of domestic steelmakers and cutting their profit margins.
“We are pursuing a cut with the Finance Ministry. We want to make it zero. It cannot be 2.5 per cent to 2 per cent. It will help the sector,” Steel Minister Chaudhary Birender Singh told reporters on the sidelines of an event on Thursday.
Rising prices of coking coal, which is a key input material for steelmakers, have been a matter of concern for the sector. Currently, import duty on coking coal is 2.5 per cent and many steel companies are dependent on imported coking coal as the quality of domestic coal is not suitable for the steel industry, due to higher ash content. In the last one year, coking coal imports rose 13 per cent and steelmakers had been complaining about the 2.5 per cent import duty.
The request had been pending since January and the Steel Ministry is once again pushing it.
India is the third largest steel producer in the world and the sector contributes to over 2 per cent to India’s GDP.
The Steel Ministry on Thursday gave away Secondary Steel Sector Awards to 26 mini steel companies in recognition of their contribution to the nation’s economy. At present, India’s steel sector has a capacity of 134 million tonne (MT) and consumption of steel has almost touched 70 kg per capita in the country.
Currently, secondary steel sector contributes to more than half of the total steel production in the country. “The secondary industry contributes 57 per cent to the total domestic steel output. It is claimed that when the capacity would be 300 MT, their share would increase to 70 per cent. It is an important sector and is being awarded for the first time,” Singh explained.