Export duty hike on steel to hit projects under PLI: ISA

DELHI: Imposition of export duties on steel products will send a negative signal to investors and adversely impact capacity expansion projects under PLI scheme, steel industry players said after the Centre removed customs duties on raw materials and hiked export taxes to check local prices.

The government on Saturday waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move to lower the cost for the domestic industry and reduce prices. Also, to increase domestic availability, the duty on exports of iron ore was hiked up to 50% and that of a few steel intermediaries to 15%, according to a notification.

The steelmakers’ body, the Indian Steel Association (ISA), said the industry welcomes the removal of import duty on coking coal and few other input raw materials for the industry.

“However, imposition of export duty on steel will only send a negative signal to investors in the steel sector and will adversely impact the sector’s capacity utilisation. India has been increasing its engineering and steel exports over the last two years and has the potential to become part of a larger global supply chain,” it said.

“India may lose export opportunities now and this decision may also impact the overall economic activity in the country,” the association said.

The imposition of export duty will help other countries to increase their share in the global market, which India will vacate. Rebuilding lost ground may take a long time, as the supply chain will be disrupted, while India’s credibility as a reliable exporter will take a hit, ISA noted.

“The steel industry in India has made the largest investment commitments ranging from 36% to 40% of total investments committed by the entire manufacturing sector. These investments in capacity building are needed to achieve the Atmanirbhar Bharat Vision,” it said.