On May 27, Finance Minister Nirmala Sitharaman announced on social media that the country has decided to make a series of changes to the tax structure for key commodities, effective May 22, general media reported.
In addition to lowering import tariffs on coking coal and coke from 2.5 percent and 5 percent to 0 percent, India’s move to significantly increase export tariffs on steel products is also attracting attention.
Specific view, India to width over 600 mm hot rolling, cold rolling and plating board roll of imposing a 15% export tariff (formerly zero tariffs), iron ore, pellets, pig iron, bar wire and some varieties of stainless steel export tariffs also has different degree increase, including iron ore and concentrate product export tariffs by 30% (only applicable to iron content more than 58% of the block), Adjust to 50% (for all categories).
Sitharaman said tariff changes for steel raw materials and middlemen would reduce domestic manufacturing costs and prices of final products to counter high domestic inflation.
The local steel industry does not seem satisfied with this sudden surprise.
Jindal Steel and Power (JSPL), India’s fifth largest crude Steel producer, may be forced to cancel orders to European buyers and suffer losses after an overnight decision to impose export duties on Steel products, managing director V R Sharma told media.
JSPL has an export backlog of about 2 million tonnes destined for Europe, Sharma said. “They should have given us at least 2-3 months, we didn’t know there would be such a substantial policy. This can lead to force majeure and foreign customers have done nothing wrong and they should not be treated like this.”
Sharma said the government’s decision could raise industry costs by more than $300 million. “Coking coal prices are still very high and even if import duties are removed, it will not be enough to compensate for the impact of export duties on the steel industry.”
The Indian Iron and Steel Association (ISA), a steelmakers’ group, said in a statement that India had been increasing its steel exports over the past two years and was likely to take a bigger share of the global supply chain. But India may now lose export opportunities and share will also go to other countries.