India considering proposal for calibrated reduction of export duty on steel

The government is examining the proposal for calibrated reduction of export duty on steel, people in the know of the matter have told CNBC-TV18.

It is learnt that Finance Minister Nirmala Sitharaman along with top Finance Ministry and Steel Ministry officials reviewed the export duties on steel and iron ore on Monday.

However, as per sources, the duties on iron ore are likely to stay for the time being as the revenue department is yet to take a final decision.

Steel companies have been facing multiple headwinds in the form of higher raw material prices, export duties and falling demand because of a possible recession in developed markets.

Steel companies such as JSW Steel, Tata Steel, Hindalco, Jindal Stainless ended Tuesday's trading session 0.3 to 1.5 percent higher, while NMDC ended nearly 0.4 percent lower. 

In May, India imposed a 15 percent export duty on finished steel, to protect the domestic need due to geopolitical uncertainties. The Indian Steel Association (ISA) had urged the Centre to review the recent imposition of export duty on steel products.

ISA’s Secretary General Alok Sahay had told CNBC-TV18 that it wasn't possible for prices to correct as the cost of making steel was already very high due to volatility in coal prices. The association requested the Centre to look at reasons behind price volatility and the existing benchmark indexation systems which automatically change price.

The Jindal Steel & Power Limited's Managing Director VR Sharma had told CNBC-TV18 in May that the sudden imposition of export duty by the Centre would force steel mills to stop export bookings.

Last month, Seshagiri Rao, the Joint MD and Group CFO of JSW Steel, had said that imposition of export duty has hurt the steel industry and in turn will hurt the economy. “Exports, in the last year were 18.5 million tonne whereas in this year they have already fallen, on a proportionate basis for 4 months, more than 50 percent. So, that also is impacting the overall production in India,” he had said.