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The Union steel ministry will recommend removal of the five per cent import duty on scrap, says minister of state Vishnu Deo Sai.
At a seminar organised by the Metal Recycling Association of India (MRAI) here on Thursday, he said they’d take this and other steps for the scrap recycling industry.
However, removal of the import duty would affect primary producers, with the thin margins these mills are currently operating at. Levied two years ago, India is the only country in the world which levies a duty on steel scrap import.
“India has also signed free trade agreements (FTA) with a number of countries. Under the agreement, semi-finished products are imported duty-free into India, as against a five per cent import duty on steel scrap. This inverted duty structure exists nowhere else in the world. Many recycling units in the south are bleeding because of inability to process the scrap,” said Iqbal Nathani, president of MRAI.
Abolishing the duty will proportionately reduce the cost of secondary steel production. Output from here contributes to a fourth of India’s total estimated annual steel production of 80 million tonnes. The industry says the levy has raised the cost of production by Rs 600-700 a tonne for steel melting scrap and Rs 2,500 a tonne for stainless steel.
A Frost & Sullivan report estimates Indian foundry units might lose Rs 11,000 crore of export business to competitors such as China and Taiwan due to the import duty, says the scrap trade.
Subhash Desai, minister of state for industries, government of Maharashtra, has offered land to the industry at the Delhi-Mumbai Industrial Corridor and at Aurangabad to set up a recycling zone.
