India's 2013 Budget: What Steel Producers Want

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The lead-up to the annual Indian budget, just around the corner, invariably becomes an exercise of give and take for the country’s various sectors and industries that drive the economy.

At the center of our concerns at MetalMiner are India’s steel and aluminum sectors. Leaders from both have started haranguing the Indian government for industry SOPs in order to maintain the competitive spirit and keep these sectors headed in the right direction.

It’s an interesting exercise, this submission of wish lists.

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Petitions by industries are submitted to the Finance Ministry, urging the minister to factor in ‘important points’ while drawing up the budget to be presented on Feb. 28. Hectic lobbying starts within the labyrinths of government to ensure that the ministry does not overlook certain industry-specific subjects.

So, as is the norm around this time every year, the steel and aluminum sector leaders have started putting forth their “requests” to the government. Here’s a look at what the steel sector wants.

High on the priority lists of Indian steelmakers this year is an increase in the duty on cheap steel imports to rein in dumping of the material into the country. Industry biggies like Tata Steel and Jindal Steel have gone on record stating that the budget needs to revisit last year’s hike in excise duty and take steps to discourage dumping of steel products.

Last year, the government had enhanced basic customs duty on non-alloy, flat-rolled steel from 5 percent before to 7.5 percent, and also hiked the excise duty at the same time.

Almost everyone in the industry feels that import duty should be hiked to 10 percent. What is making the steelmakers nervous is the fact that in the first half of the current fiscal year, imports had gone up by 40 percent of the total, compared to the same period in the previous year.

Jindal’s Managing Director and CEO Ravi Uppal has asked the government to take steps towards discouraging dumping into India as this would destroy the potential of the domestic steel industry. Many of the steel companies in India fear China, which is the single-largest producer of steel in the world.

The Hindu Businessline reported that smaller players in the business expect safeguard tariffs to be put up on sponge iron and other iron variants’ imports too — from the present 5 percent to 10 percent — in the budget.

If the steel guys are making such requests, can the aluminum fellas be far behind? Continued in Part Two.

Sohrab Darabshaw contributes an Indian perspective to MetalMiner. 

FREE WEBINAR: If you’re a manufacturer with a steel or aluminum buy, learn how buying custom mill shapes (vs. standard products) can reduce your spend – register now!

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