 "steel industry")
By Sudarshan Varadhan
NEW DELHI (Reuters) - Shares in Indian steel and iron ore groups including Tata Steel and JSW Steel slid on Monday at the steepest pace since early 2020 after the government imposed heavy export taxes on the sector, while carmakers rose on lower input costs.
India imposed an export tax of 15% on eight steel products late on Saturday at a time steelmakers are looking to make up for tepid local demand by increasing market share in Europe, whose supplies have been hit by Russia's invasion of Ukraine.
It also boosted export taxes on iron ore and concentrates to 50% from 30% currently, and imposed a hefty 45% tax on iron ore pellets, further adding to costs for steelmakers.
The Nifty metals index fell as much as 8.9% on Monday, the fastest rate of decline since March 2020, while the Nifty auto index rose 2.9%.
Jindal Steel and Power fell as much as a fifth, while Top steelmaker Tata Steel fell 14.4% and JSW Steel 14.2%. State-run SAIL tumbled as much as 14%.
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The iron ore industry, which had benefited from a Supreme Court judgment allowing exports to resume from a key southern state on Friday, was hit hard by the move to boost export taxes on Saturday.
Shares of state-run NMDC fell 15%, while those of top mining conglomerate Vedanta slid as much as 7%.
Indian automakers will benefit from the lower input costs, as steel industry executives say higher taxes nearly rule out possibility of exports and India's domestic market will now be flooded with additional steel.
Top automaker Maruti's shares rose as much as 4.9%, while shares of Mahindra and Mahindra surged 3.8%.
The export taxes on steel were a part of a series of changes to taxes on crucial commodities aimed at reining in retail inflation, which has jumped to an eight-year high.
(Reporting by Sudarshan Varadhan; Editing by Jan Harvey)
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