Budget 2018: Secondary steel makers want 2.5% import duty on scrap removed

Secondary steel industry body All India Induction Furnaces Association (AIIFA) has urged the government to remove 2.5 per cent import duty onsteel melting scrap in the budget 2018.

The Joint Planned Committee (JPC) under the Steel Ministry has suggested abolition of basic customs duty on import of steel melting scrap, AIIFA Secretary General Kamal Agarwal claimed, adding that the recommendation should be considered.

The AIIFA represents electric induction melting furnace industry which produces products like mild steels, low alloy steels and stainless steels and others.

Agarwal, who was here for International Indian Metals Recycling conference told PTI that as per the steel ministry data around 28 million tonnes (MT) of steel was produced from scrap in 2015-16 out of total 52 MT steel that was produced through electric route.

India imports close to 7 million tonnes of scrap which leaves with a need to internally generate over 23 million tonnes of steel scrap annually, Agarwal said.

Import of melting scrap has become very necessary due to insufficient availability of domestic scrap, he added, adding that removal of import duty will help lower their production cost.

To support small and medium steel enterprises which are dependent up to 60 per cent of their raw material requirements on imports, the government should abolish the customs duty for making them competitive against cheapersteel imports, he said.

"The necessity of importing scrap has also become important because of the enforcement of quality control order passed by the steel ministry restricting production and sale ofsteel whose quality does not meet a certain standard of metallurgical composition and mechanical properties of stress and elongation," he said.

Agarwal said that using melting scrap for making steel offers other benefits like saving natural resources such as iron ore, limestone, coal and water and reduce emissions.

Recycling of one tonne of steel scrap saves not only 1.2 tonneof iron ore, 0.7 tonne coal, 0.5 tonne lime stone, 287 litres of oil, 2.3 cubic meters of landfill, 40 per cent less water and overall 58 per cent reduction in GHG emission, he argued.

Steel scrap is also necessary forproducing quality steel in present scenario.

The country imposed 2.5 per cent duty on scrap imports in May 2014.

The AIIFA would like to highlight that countries like the US, Europe, the UK, Australia, China, Thailand andPakistan have no such duty applicable on import of scrap, Agarwal said.