A budgetary proposal by the Indian government to reduce steel duties has divided the Indian steel sector.
India proposes reduction in steel duties
In her 2021 budget speech presented in parliament earlier in the week, Finance Minister Nirmala Sitharaman proposed reducing customs duty on imports of semi-flat steel. She proposed cutting the duy for the steel, used to make ships, bridges, line pipes and other equipment, from 12.5% to 7.5%.
Furthermore, the customs duty on longs — used to make rails and wire rods — may also be reduced from the present 10% to 7.5%.
Another proposal called for revoking anti-dumping and countervailing duties on straight length bars and rods of alloy steel, high-speed steel of non-cobalt grade flat-rolled product of steel, plated or coated with an alloy of aluminum or zinc.
At least initially, the move could be interpreted as India opening its doors to cheaper steel and reducing the tax on shipments of the alloy amid surging prices at home.
The chief executives of some of global steelmakers such as JSW and Tata Steel have opined that this would not allow any increase of flow in these steel items. Meanwhile, others fear it will have a negative impact on the profitability of domestic players.
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