Domestic steel makers pitch for hiking duty on steel import.

Domestic steel manufacturers want government to hike duty on its imports to rein in dumping of the alloy into the country.

"In order to protect interests of the domestic industry, Budget needs to revisit last year's hike in excise duty and take steps to discourage dumping of products," Tata Steel's Managing Director H M Nerurkar said in his Budget wish-list.

The government had in the Budget for the current fiscal enhanced basic customs duty on non-alloy, flat-rolled steel from five per cent earlier to 7.5 per cent. It also hiked the excise duty at the same time.

Nerurkar said the duty hike on steel imports is needed as the volume of shipments has increased by a whopping 40 per cent in the first six months of the ongoing fiscal.

"In line with the government's policy of reducing import duty for raw materials for making steel, import duty on steel grade limestone, dolomite (which is presently five per cent) and iron ore (which is currently 2.5 per cent) should also be reduced to zero," he added.

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Jindal Steel and Power's MD & CEO Ravi Uppal asked the government to take steps for discouraging dumping into India as this would destroy the potential of the domestic steel industry.

"No dumping should be allowed in steel in India. The main challenge is China. They produce 750 million tonnes of steel and can easily dump it in India. If that happens, then the baby (Indian steel industry) will die in its cradle," he said.

Dumping in international trade means export by a country of a product at a price that is lower in the foreign market than the price charged in the domestic market.

"The domestic steel capacity has to be protected and we project that from under 100 million tonnes per annum (mtpa), it will rise to 130 MTPA by 2018. This will make India the second largest steel maker in the world from its current fourth position," Uppal added.

Uppal said there is a need to stimulate the demand as it has slowed down due to less infrastructure spend.

"Even future capacity expansion has been affected due to slowdown in mining activities in states like Karnataka, Goa and parts of Odisha," he said.

Both of them also urged the government to clear hurdles like delay in project approvals and environment clearances to enable the domestic steel sector to grow.

"The Indian steel industry is facing problems due to shortage of iron ore and continued delays in project approvals. The industry will benefit from proactive actions on these fronts in the Union Budget," Nerurkar said.


Source: moneycontrol.com