Posted on 07 Sep 2022
The Indian finance and steel ministries, in a closed-door meeting on Tuesday, formally reviewed the impact on industry of steel export duties levied in May.
According to CNBC-TV18, the finance ministry is mulling a calibrated reduction of export duties on steel. However, the duties on iron ore are likely to stay, although the revenue department is yet to make a decision.
Kallanish could not reach the steel ministry for confirmation before Tuesday's deadline.
This meeting follows multiple requests from the Indian Steel Association, steel mills and, most recently, the Federation of Indian Chambers of Commerce and Industry (FICCI) to remove export duties.
According to FICCI, the decision to impose the export duty in May will have no positive impact on the Indian steel industry. It will however adversely affect pig iron producers, making it unviable for them to export surplus pig iron (see Kallanish 6 September newsletter).
Earlier, the steel ministry also reviewed the impact of duties on production, sales, demand, and capacity expansion projects at major Indian steel mills. According to sources, the various stakeholders of the Indian steel industry made presentations on the negative impact of the export tax on the industry.
The industry is also lamenting the loss of principal export markets for flat steel on the back of the duty imposition, and urging authorities to take back the duties.
Furthermore, the influx of cheaper Russian hot rolled coil into India has dented domestic sentiment. Industry sources complain that steel can come into India freely but cannot be exported, despite the fact India is the second-largest crude steel producer in the world.
The duty imposition has cut short India's place in the global export trade. As global steel prices are surging on the back of rising energy costs, Indian mills are seeing lost opportunities amid the 15% duties. Meanwhile, a typhoon has impacted South Korean steel operations, meaning Korean HRC prices are expected to surge in the future. This could in turn benefit India in the export market, but only if the export duties are withdrawn.
Source:Kallanish
