Steel industry hopes Budget will focus on infra, fair trade measures

Companies want support for capacity addition and anti-dumping measures against substandard imports

India’s leading steel companies are adding capacity and hope the upcoming Budget will facilitate their investments by taking measures for raw material security, infrastructure development and fair trade.

Steelmakers will add around 38.5 million tonne per annum (mtpa) of new capacity by Financial Year 2026-27 (FY2027). The government’s focus on infrastructure, the largest user of steel, has boosted demand and companies hope that the thrust continues in the Budget.

T V Narendran, managing director and chief executive officer (CEO) of Tata Steel, said, the government should continue backing infrastructure and ease of doing business.

Jayant Acharya, joint managing director and CEO of JSW Steel, said extending the concessional tax rate of 15 per cent for new manufacturing companies would facilitate large investments. The concession is valid till March 31, 2024.

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“This will be required to offset the delays caused by the pandemic and geopolitical tensions and the extension of the scheme is essential because the investments in the steel industry are very large,” said Acharya.

Indian companies say the country is becoming a dumping ground for imports from places with weaker demand. China accounted for the largest share in finished steel imports in 2023, prompting Indian companies to push for trade remedial measures.

Low-priced imports, especially from China and free trade agreement countries, were putting pressure on Indian steel companies' margins. “The investments planned by the steel industry towards creating self-reliance and Make in India are large. We need to control this unfair trade with effective trade remedial measures and hope that the government will act swiftly on this,” said Acharya.

Dilip Oommen, CEO of ArcelorMittal Nippon Steel India (AM/NS India), also called for a stronger focus on anti-dumping measures. He wanted the Budget to have steps for raw material security, infrastructure investment, competitive financial ecosystem, research and development incentives, export promotion, skill development and environmental sustainability.

“Push to domestic manufacturing would not only provide a clear advantage to attract investment and create jobs but also make India globally competitive in the long run to emerge as a viable alternative to China,” said Oommen.

Dumping and substandard imports from China was a well-established challenge for the stainless steel sector, said Abhyuday Jindal, managing director of Jindal Stainless.

“To address this issue, we propose the establishment of fixed tariff values for stainless steel and also amendment of the trade remedial laws to delete the ‘lesser duty rule’ and impose duty based on subsidy margin/dumping margin,” he said.

Steelmakers are hoping for Budget proposals to reduce input costs. Oommen said, “Rationalising the taxation of key inputs like natural gas, coking coal, electricity, and iron ore can help the Indian steel industry to be more sustainable.”

Customs duty on coking coal should be removed as the raw material is not available domestically, said Acharya.

Jindal called for a long-term exemption of basic customs duty on ferro nickel and ferro molybdenum to ensure the steel industry can access important raw material at competitive rates. “Additionally, we advocate for the continuation of zero customs duty on stainless steel scrap and steel scrap, besides pure nickel. We also request continuing export duty of 30 per cent on exports of chrome ore from the country,” he said.

According to Narendran, the government should consider incentivising the adoption of and transition to greener process routes.