Govt. panel backs higher carbon tax on coal imports
With imports from China and Vietnam rising since last October, India is likely to be a net finishedsteel importer in 202324 after a gap of five years, and is likely to remain so in the coming year as well unless the external demand environment improves meaningfully, rating agency ICRA has said.
Moreover, domestic steel consumption growth is expected to slide to 7%8% after three years of doubledigit growth, down from about 12%13% this year, while higher input costs and soft steel prices will squeeze operating profit for margins for producers by 110115 basis points
Local demand has been slowing over December and January, growing by just 6.5%.
in 202425, according to a ICRA research note.
Domestic demand has already been slowing over December and January, when it grew just 6.5%, after six months of about 16% growth.
“While these are early trends, the numbers nonetheless hint at demand remaining soft over the next two quarters as the government spending moderates around the election period,” remarked Jayanta Roy, Senior VicePresident and Group Head of Corporate Sector Ratings at ICRA.
On the external front, steelmakers remain on tenterhooks, ICRA said, as multiple structural headwinds in China have propelled its steel exports to a sevenyear high in 2023.
“With most other large steelconsuming hubs globally also facing subpar economic activities in the near term, global steel trade flows have been increasingly redirected to highgrowth markets like India,” ICRA said.
A panel of officials from Indian Ministries has called for a bigger carbon tax on higher quality imported coal while cutting rates for domestic coal, in a bid to slash shipments of the polluting fuel, the Coal Ministry said on Thursday.
Coal is among India’s top five commodity imports by value. Despite surging local output, mainly of lowquality coal with high ash content, it failed to cut back on imports and ranks as the world’s secondlargest importer. India’s imports of thermal coal rose nearly 10% in 2023 to 176 million tonne.