Budget FY21 wishlist: Steel sector seeks duty cut on key raw materials

Among the demands are proposals to bring import duty on anthracite coal from the current 2.5 per cent to nil.
For representation purposes
For representation purposes
Updated on
2 min read

India’s steel industry is seeking a cut in basic customs duty on several key raw materials during the soon-to-be-announced Union Budget, including coking coal, pet coke, limestone and dolomite. In a list of recommendations submitted by industry body FICCI to the finance ministry, the industry said it depends on imports since there was a lack of good quality materials in India. 

“Anthracite coal, coking coal, coke, limestone, dolomite are vital inputs for the steel industry. The availability of these items in good quality is declining in India and the industry has to depend on imports on a regular basis,” FICCI said. 

Among the demands are proposals to bring import duty on anthracite coal from the current 2.5 per cent to nil. FICCI pointed out that since the ferroalloy industry plays a vital role in steel manufacturing, it is necessary to make these reductants available at a globally competitive price to make Indian steel mills more effective. 

Meanwhile, met coke, another key input material had seen an increase in basic customs duty was enhanced from 2.5 per cent to 5 per cent with effect from March 1, 2015. An additional anti-dumping duty had also been imposed on its imports from November 25, 2016.

“As a result, the cost of this (met coke) vital input in steel manufacturing has gone up necessitating increase in price of steel which is acting as deterrence to the competitiveness of domestic products in international markets vis-a-vis similar products of other countries like China,” FICCI said, noting that high inputs costs have led to an inverted duty structure in the domestic industry and were acting as a deterrent to the government’s Make in India initiative since domestic producers have less incentive to import met coke.

“Rather, imports of finished steel goods are preferred,” it said, pointing out duty on metallurgical coke needs to be reduced to zero.

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