The government’s announcement to remove the export duty late on Friday was applauded by the steel sector. The tax, which had been introduced in May, was eliminated as of Saturday. According to a notification from the Finance Ministry, iron ore lumps and fines with “less than 58 percent Fe” will not be subject to export taxes. The rate of duty is 30% for lumps and fines of iron ore that include more than “58% Fe.” The export of steel products, pig iron, and iron ore pellets (all of which are categorized under the Harmonized System or HS 7201, 7208, 7209, 7210, 7213, 7214, 7219, 7222, and 7227) is duty-free.
According to a statement from the Finance Ministry, “the existing steps will provide the domestic steel industry a boost and increase exports.” The government had imposed export duties in May that ranged from 15% for steel to about 50% for iron ore (including concentrates). Since then, domestic steel prices have been declining. Additionally, the import tariff on anthracite/PCI, coking coal, ferro-nickel, and these materials will be 2.5%, compared to 5% for coke and semi-coke. In May, they received an exemption. The tariff removal occurs just after India’s steel exports, which fell by the most this fiscal year by 66 percent in October to 360,000 tonnes due to higher prices than competitors and weaker global demand.
According to figures from the Steel Ministry, exports in October 2021 totaled 1.05 million tonnes. According to a tweet from the Indian Steel Association, the action “would go a long way in restoring India’s trade deficit.” Dilip Oommen, CEO of ArcelorMittal Nippon Steel India and president of the International Steel Association, claims that this will re-energize the industry and propel it toward an inclusive growth path. “I am confident this will give a thrust to Make in India and Local to Global agenda of the government,” said Abhyuday Jindal, Managing Director of Jindal Stainless. “It will be a big sentimental booster to revive domestic steel offtake especially when the global steel demand is on a steep decline,” said Seshagiri Rao, Joint MD, JSW Steel & Group CFO.
A segment of the steel sector, however, was unhappy with the decisions made on coal. “Restoring import taxes on coking coal and coke is somewhat of a sore place, especially at a time when global prices are once again on the rise. Let’s wait and see how the reinstatement of import duties affects us, advised a steelmaker who wished to remain unnamed.