Steel sector urges Centre to withdraw export duty, fears it may affect investments in capacity creation

Export duty on steel sends metal stocks into a tailspin but fuels auto shares

While appreciating the government’s efforts to reduce inflation, he opined that steel prices aren’t culprit behind worldwide inflations and overdrafts availed by different governments. Pointing to nearly 2 million tonnes of steel orders in the pipeline, where either LCs have been established or the sales contracts have been signed, he said that impact of the duty will be borne by exporters.

Reminding that from chasing the government’s target of USD 1 trillion of export revenue per year, the industry is now being asked not to export steel because with a 15 percent duty it won’t be a competitive proposition.

Pointing to the confusion created by the government’s orders, he stated that on one hand the steel industry was being encouraged by a PLI scheme to expand capacities, while on the other hand exports are being discouraged.

He explained that low-grade iron ore isn’t required by Indian steel mills due to lack of beneficiation plants, hence banning iron ore as well as pellets is contradictory to each other.

Suggesting that the imposed duty should be withdrawn, Sharma said that even if it remains, the industry should be given at least 3 months to taper off existing orders and supply the orders taken. He requested the Centre to look into Coal India’s production numbers and try increasing the coal output to at least 1500 million tonnes per year instead of the existing 800 million tonnes, which will immediately cool down prices of all of commodities across the product list.

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