The Union Ministry of Steel has asked the finance ministry to reconsider imposition of import duty on steel products and a decision is likely soon, said Pramod Kumar Rastogi, secretary to the steel ministry. The ministry had originally recommended the removal of export duty and imposition of import duty on some steel products.
“Though the proposal for the removal of export duty on steel products like pig iron, iron and steel ingots, rods, bars, long products and shapes was accepted and withdrawn on October 31, 2008, to encourage Indian steel producers to export despite falling global prices, imposition of import duty was put on hold to protect the interests of steel producers and consumers,” he said.
At that time, the finance ministry had calculated that the steel prices had not come down to the level where they required protection for the import of steel, he added.
Rastogi was addressing mediapersons on the sidelines of the ‘Indian Steel Making Raw Materials conference’ held on the occasion of NMDC’s golden jubilee in Hyderabad on Tuesday.
The minister said the country’s second largest producer, Steel Authority of India (SAIL), was likely to lower the output of some of its products including hot rolled (HR) coils and long products due to the plummeting demand.
“Demand for long products and HR coils in India had declined," he said, pointing out that SAIL had cut down the production of HR coils and long products by 37 per cent last year. “Rationalisation is a long-term plan,” he said.
Speaking on the occasion, NMDC Chairman and Managing Director Rana Som said a system of price indexation for iron ore should be put in place, which would look into the needs of both the suppliers and the buyers. Currently, there is no such system in the industry and prices are always determined by the demand at the international or national level. For this, indexation is the only solution, he said.
“The entire world is depending on one source of demand and this glut in the market cannot be a hygienic situation in the long run. A pricing mechanism by giving benchmark prices on a par with international prices should be in place,” he added.