Stainless steel sector seeks customs duty cut on raw materials

Despite the brimming global trade challenges, Pahuja noted that India continues to be the second largest producer and consumer of stainless steel.

Published: 22nd June 2019 11:05 AM  |   Last Updated: 22nd June 2019 11:05 AM   |  A+A-

By Express News Service

NEW DELHI: Ahead of the Union Budget 2019-20, domestic stainless steel makers have written to the government seeking relief from customs duty on import of key raw materials, in order to boost production.
In its submission to the government, India’s apex stainless steel industry body — Indian Stainless Steel Development Association (ISSDA) — has apprised that Ferro-Nickel and stainless scrap attracts an import duty of 2.5 per cent each. These raw materials, the association said, are unavailable in India and has to be imported elevating overall cost of stainless steel production.

“The industry is at an inflection point and is currently ailing due to high-cost burden, resulting in non-competitive products. We urge the government to not see the duty on raw materials as a revenue source; rather, consider the larger vision of kick-starting invincible economic growth along with higher manufacturing growth and job creation,” said K K Pahuja, president, ISSDA. Any revenue loss due to relieving basic customs on Ferro-Nickel and stainless steel scrap will be more than made up by a higher domestic production, he added.

Despite the brimming global trade challenges, Pahuja noted that India continues to be the second largest producer and consumer of stainless steel. The demand for stainless steel is growing at 8-9 per cent across an array of applications, but the domestic industry is marred by the dual challenge of excessive dumping by other major stainless steel producing countries like Indonesia and China, and non-availability of key raw materials in India.

Moreover, the capacity utilisation of the Indian stainless steel industry is stagnant at 70 per cent as cheap imports eat into market share and erode competitiveness of domestic players due to high raw material prices, he added.

Major steel players have already filed a safeguard duty petition against the cheap-imports threat in the face of trade wars and a new global wave of protectionism. Zero duty on key raw materials will also help realise the Make in India initiative, ISSDA said.

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