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The Finance Bill detailed that the government was exempting flat rolled steel, including non-alloy, plated or zinc-coated steel under categories 7210 and 7212, from the export duty retrospectively. The government even fully exempted galvanised steel sheets from export duty, retrospectively.
The sector has been asking for the necessary push for infrastructure and construction projects, which would revive steel demand in India. The government announced an additional interest deduction of Rs 1 lakh on a housing loan of up to Rs 25 lakh. This move is expected to boost housing demand, directly benefiting the steel sector.
Dilip Oommen, chief executive officer and managing director, Essar Steel India Ltd, said: "While a whole lot of measures have been earmarked for infrastructure, the only few positives from the budget, and so likely to revive the flagging fortunes of core industries to some extent like steel, it remains to be seen how much of it is actually implemented."
The steel sector has been demanding a higher import duty, as recent months have seen a lot of cheaper steel finding its way into India. From April 2012 to January 2013, imports into India rose 17.5 per cent to 6.5 million tonnes (mt).
However, the government did not announce an import duty on steel.
A senior official from a large steel company, said: "Imports from China, (South) Korea and Japan have been on the rise and we have been asking the government to remove steel from the FTAs (free trade agreements). As part of our budget wishlist, we asked for import duties but the demand has gone unanswered."
Because of the ongoing iron ore issues in India, the sector also demanded the government remove duty on import of iron ore. However, even this, too, went unnoticed. India is expected to import 1 mt of iron ore in the current year because of the scarcity locally.
However, there is relief the finance minister has not succumbed to iron ore exporters' lobby and retained export duty.
