The export levy on steel will slow down the nation’s ambitious journey towards a $5 trillion economy, said Dilip Oommen, president, Indian Steel Association (ISA), on Tuesday.
In a statement, Oommen said that the cut in import duty on certain raw materials was welcome. “However, the export levy on steel would slow down the nation’s ambitious journey towards a $5 trillion economy at a time when the world is looking at us as a stable policy country, a manufacturing and export hub that is closely integrating with global value chains,” he said.
Oommen is also ArcelorMittal Nippon Steel India (AM/NS India) chief executive officer, but his comments were as the president of ISA. The association represents major steel companies.
In a bid to bring down inflation, the government on Saturday announced a host of measures that included reducing import duty on key raw materials for steel and imposing a 15 per cent export duty on steel to increase availability.
While end users of steel hailed the decision, the move dealt the steel industry a blow, hitting 95 per cent of the steel export basket.
“The duty will also jeopardise the much-promoted PLI scheme as well as the National Steel Policy that aims to make India a leading, self-reliant, steelmaking nation and export hub with production capacity of 300 MTPA,” said Oommen.
The immediate impact of the decision, said Ommen, would be that the industry would be reviewing its massive expansion plans, as India is a net exporter.
Last year, India exported over 13 million tonnes of finished steel. If semi-finished steel is included, then exports would be more than 18 million tonnes. But semi-finished has been kept out of the export duty purview.
Oommen cautioned that existing capacity utilisation itself has to be curtailed. On steel prices, he said that prices had already corrected 10 per cent before the export duty imposition.
“With input prices coming down due to import duty cuts, the steel prices would have further come down,” he explained.
Oommen appealed to the government to review the decision, and hold consultations with the industry players to find out a comprehensive solution that would benefit all stakeholders.
“The export market that we are forced to vacate will be taken by other countries, especially China. To maintain credibility in the eyes of customers, we should not be seen as unreliable suppliers by exiting markets that was painstakingly created,” he said. (Business Standard)
