Govt proposes to cut import duties on steel to aid MSMEs
Steel

Govt proposes to cut import duties on steel to aid MSMEs

The government has proposed disbanding import taxes on steel to aid MSMEs, which has been hit hard by the surge in cost of raw materials amid the second wave of Covid-19, bringing it to zero or net zero levels.

The decision had been looked upon to re-examine duties on steel products and veto the taxes or reduce them to help the industries as prices of materials skyrocketed in the midst of the pandemic.

These changes could also bring back the steel companies that deviated from steel production to oxygen plants when hit by crisis during the Covid-19 pandemic and restore the supply lines.

Finance Minister Nirmala Sitharaman had remitted anti-dumping duty (ADD) and countervailing duty (CVD) on certain steel products and reduced customs duty on -- semis, flat, some products of non-alloy, alloy, and stainless steels from 10-12.5% to 7.5% while cutting down taxes on steel scrap for the fiscal year 2021-22.

The custom cuts will be officialised soon by the Directorate General of Foreign Trade (DGFT). Overlooking iron-ore supply constraints and rise in high global prices, the domestic hot-rolled coil (HRC) had surged from Rs 39,200 per tonne in March 2020 to Rs 56,000 per tonne in February and then to Rs 58,000 in April.

Further increase in Indian steel prices is expected with steel industries in demand and China cutting export incentives to support steelmakers.

The steelmakers are concerned that a cut in import duty could risk the quality of steel flooding our markets with cheap and low-quality steel.

They stated that the proposed decision of the government may become effective after a long period but could come across the same issue again.

Investment Information and Credit Rating Agency (ICRA) mentioned a report that Indian steel mills would unload steel in large quantities to export markets and would be profitable amidst the reduction in demand due to the second wave of Covid-19 pandemic and lockdowns.

However, duty cuts would limit margins and bring a lot of export destined products back into the domestic market.

Image Source


Also read: High Price Point: Where is the future of steel industry headed?

Also Read: ArcelorMittal Nippon Steel India begins feasibility study for steel plant

The government has proposed disbanding import taxes on steel to aid MSMEs, which has been hit hard by the surge in cost of raw materials amid the second wave of Covid-19, bringing it to zero or net zero levels. The decision had been looked upon to re-examine duties on steel products and veto the taxes or reduce them to help the industries as prices of materials skyrocketed in the midst of the pandemic. These changes could also bring back the steel companies that deviated from steel production to oxygen plants when hit by crisis during the Covid-19 pandemic and restore the supply lines. Finance Minister Nirmala Sitharaman had remitted anti-dumping duty (ADD) and countervailing duty (CVD) on certain steel products and reduced customs duty on -- semis, flat, some products of non-alloy, alloy, and stainless steels from 10-12.5% to 7.5% while cutting down taxes on steel scrap for the fiscal year 2021-22. The custom cuts will be officialised soon by the Directorate General of Foreign Trade (DGFT). Overlooking iron-ore supply constraints and rise in high global prices, the domestic hot-rolled coil (HRC) had surged from Rs 39,200 per tonne in March 2020 to Rs 56,000 per tonne in February and then to Rs 58,000 in April. Further increase in Indian steel prices is expected with steel industries in demand and China cutting export incentives to support steelmakers. The steelmakers are concerned that a cut in import duty could risk the quality of steel flooding our markets with cheap and low-quality steel. They stated that the proposed decision of the government may become effective after a long period but could come across the same issue again. Investment Information and Credit Rating Agency (ICRA) mentioned a report that Indian steel mills would unload steel in large quantities to export markets and would be profitable amidst the reduction in demand due to the second wave of Covid-19 pandemic and lockdowns. However, duty cuts would limit margins and bring a lot of export destined products back into the domestic market. Image SourceAlso read: High Price Point: Where is the future of steel industry headed? Also Read: ArcelorMittal Nippon Steel India begins feasibility study for steel plant

Next Story
Technology

We’re building robots that flow, not just move

Founded in 2021, Flo Mobility is reimagining construction automation with vision-AI robots designed for seamless movement through complex sites. In conversation with CW, Manesh Jain, Founder & CEO, discusses the company’s origin, its LiDAR-free tech stack, and expansion plans in the Middle East and US.What inspired the name Flo Mobility? Why ‘Flo’ and not ‘Flow’?When we started the company in 2021, our focus was on building autonomous navigation systems for robots. Since our work centred around robot movement, ‘mobility’ naturally became part of the name. We wanted to co..

Next Story
Real Estate

We’re committed to setting benchmarks in sustainable luxury living

From a landmark land acquisition in Boisar to ambitious launches across the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, Birla Estates is driving future-ready growth with a strong focus on sustainability, partnerships and premium living, firmly anchored in its LifeDesigned® philosophy. K T Jithendran, Managing Director & CEO, outlines the company’s premium, sustainable growth playbook in conversation with PRATAP PADODE, Editor-in-Chief, CW. Excerpts:Birla Estates recently acquired a 70.92-acre land parcel in Boisar, Maharashtra, for..

Next Story
Infrastructure Urban

Mumbai’s land crunch and ageing homes call for structured renewal

Founded in 2022, Etonhurst Capital Partners is a real-estate fund management platform focused on the Indian market. As the firm achieves the first close of Rs 1.8 billion for its debut Rs 5 billion fund, Bamasish Paul, Co-founder, Managing Partner & CEO, discusses its sharp focus on redevelopment-driven value creation in Mumbai’s urban core with CW. Excerpts:Etonhurst Capital has achieved a significant milestone with the first close of Rs 1.8 billion for its Rs 5 billion fund. What factors contributed to this early success and how do you plan to attract further investments to r..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?