India Budget 2015-16:Duty hike on Steel imports may help the industry

Photo: Reuters

February 20, 2015: India is currently the 4th largest producer of crude steel in the world as against its 8th position in 2003. But the sector is hit by an abnormal surge in imports.

On this background the metals and mines sector will be looking forward to the union budget on February 28 with the duty hike on mind. Angel Broking has said they expect the government to increase import duty on steel, in view of the increasing steel imports from China and Russia. 

Total steel imports in India during 9MFY2015 have increased 57.5% yoy, led by a slowdown in the Chinese economy, steep depreciation in Russian Rouble and free trade agreement with Korea.

The Steel Ministry is also seeking a waiver of the 2.5% import duty on all its raw materials such as iron ore, coking coal, limestone, dolomite and scrap. We do not believe this is likely.

The government may however look to reduce the export duty on low grade iron ore fines, as Indian steel-makers do not use these low-grade iron ore fines for making steel.

“We believe based on the recommendation of the Mines And Steel Minister, the government may give a differential treatment to the export of low grade iron ore fines,” Angel said.

“We believe a thrust to the infrastructure sector and steps to revive the investment cycle would in general be positive for the metals/mining sector.”

Courtesy: Hellenic Shipping News