Ferro Alloys Industry Demands Increase In Import Duty.

Ferro alloys producers have urged the Centre to raise the import duty from five per cent to 7.5 per cent to protect the domestic industry.

"The current level of duty is not sufficient to protect the domestic industry. The government has over the years reduced the duty on ferro alloys, resulting in domestic players reducing capacity," said T S Sundaresan, secretary general, the Indian Ferro Alloy Producers’ Association (IFAPA).

The Indian ferro alloys industry has a capacity of 4.04 million tonnes. According to industry insiders, the output is enough to meet the steel industry’s requirement to produce more than 120 million tonnes steel.

The government has been reducing the duty since 2005-06. It was brought down to nil in 2008-09. The duty was raised to five per cent in 2009-10 following concerns raised by the industry. The imports shot up to 187,956 tonnes in 2009-10 from 97,334 tonnes in 2005-06. The value rose to Rs 1,514.7 crore in 2009-10 from Rs 591.34 crore in 2005-06.

As a result, the Indian industry was hit badly. At present, it is operating at 65 per cent capacity.

The industry fears that imports will rise further.

Sundaresan said higher import duty would help the government raise more revenue.

The industry is also demanding that power tarrifs be brought on a par with international prices, which it says are three to five times less in other ferro alloy producing countries.

At the same time, the industry has told the government not to raise the import duty on low ash low phos metallurgical coke and ferro nickel that are not available in the domestic market.

These disadvantages encouraged other countries to export ferro alloys to India at low prices, said an industry official. Therefore, it was necessary to increase the basic Customs duty on ferro alloys from five per cent to 7.5 per cent, he added.

The industry has also asked the government to withdraw the inverse duty structure in the noble ferro alloys sector to protect domestic ferro vanadium producers, who may have to stop operations for want of raw material. They urged the government to reduce the Customs duty on vanadium pentoxide and vanadium sludge/ammonium metavanadate to "nil" from 7.5 per cent.

The noble ferro alloys industry in India produces three major inputs – ferro molybdenum, ferro vanadium and ferro titanium – for the stainless steel and alloys steel industry.

The products are used as additives to produce high-grade steel used in infrastructure, automobiles and tools. The industry is catering to the critical raw material requirement of large steel producers like Steel Authority of India Ltd, Tata Steel Ltd, Jindal Stainless Ltd and Essar Steel.

All producers come under Micro, Small & Medium Enterprises and employ about 10,000 people directly and indirectly.

Source : sify.com