The Finance Ministry has removed the 15% export tax it had previously placed on numerous steel goods to boost availability and lower prices in the domestic market.
The Finance Ministry stated in a statement that the changes were made “after being satisfied that it is required in the public interest to do so.”
Mint reported in September that the government may soon announce revisions to the steel sector’s tariff structure, which might result in the export charge dropping for some items while being fully removed for others.
According to a Finance Ministry statement, the 15% export tax on many steel intermediates has been eliminated, while the tariff on high-grade iron ore has been reduced from 50% to 30% and fully withdrawn for lower grades with less than 58% iron content.
Exports of pig iron and steel products categorized as HS 7201, 7208, 7209,7210,7213, 7214, 7219, 7222, and 7227 will be duty-free.
The announcement also said that coking coal and ferronickel will be subject to a 2.5% import charge, while coke and semi-coke will be subject to a 5% import duty.
The tariff reduction followed a meeting earlier this week between Union Steel Minister Jyotiraditya Scindia and Finance Minister Nirmala Sitharaman. Among those present were Revenue Secretary-designate Sanjay Malhotra and other top officials.
“It will be a big sentimental boost to revive domestic steel demand, especially when global steel demand is on the decline,” Seshagiri Rao, joint MD, JSW Steel & Group CFO, said.
The tariff reduction followed a meeting between Union Steel Minister Jyotiraditya Scindia and Finance Minister Nirmala Sitharaman earlier this week. Sanjay Malhotra, revenue secretary-designate, and other top officials were present during the meeting.
“It will be a tremendous emotive push to reinvigorate local steel demand, especially when global steel demand is on the fall,” said Seshagiri Rao, joint MD, JSW Steel & Group CFO.
“This will re-energize and further motivate the industry to move forward with full confidence to put the steel sector on an inclusive growth path,” said Dilip Oommen, President of the Indian Steel Association and CEO of ArcelorMittal Nippon Steel India.
“However, domestic prices should not rise further for the benefit of MSME users.” “EEPC India stated.
“It ties in very well with the theme of increasing India’s export competitiveness across product categories to meet the Government’s export targets.” “MS Mani, Partner at Deloitte India, stated
The duty reduction will provide relief to the steel industry and assist them in tapping the overseas market for their products in the face of flat domestic demand and the risk of available export opportunities drying up due to concerns about a looming recession in Europe and the United States.
These decisions were made as finished steel exports fell 55% to 4 million tonnes between April and October, as large steel mills held back shipments following a 15% increase in export taxes on eight steel intermediates in May, hurting producers who had hoped to increase global market share after Russia was sanctioned for its invasion of Ukraine. According to Steel Ministry data, exports in October 2021 were 1.05 million tonnes.
Exports fell nearly 40% from September to October. The drop was seen in all categories, including non-alloy, alloyed, and stainless steel.