ISA: Hiked Export Duty on Steel Products to Impact PLI Projects

SEATTLE (Scrap Monster): The Indian Steel Association (ISA) noted that imposition of export duty on iron and steel intermediates will impact projects under the PLI scheme. The trade body said that the export duty will send a negative signal to investors, which in turn could badly impact capacity expansion projects under the scheme.

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The Finance Ministry had announced its decision to impose export duty on as many as eleven iron and steel intermediates. In addition, it had cut import duty on three key raw materials for steelmaking, including coking coal and ferronickel, in a bid to lower the cost of domestic steel production and lower the prices of steel. Additionally, as parts of efforts to boost domestic availability of raw materials, the Ministry has raised export duty on iron ore exports up to 50% and those of some steel intermediaries to 15%.

While The ISA welcomed the decision to remove import duty on coking coal and few other steelmaking raw materials, it opposed the imposition of export duty on steel, as it will adversely impact the steel sector capacity utilization. Incidentally, India’s exports of engineering goods and steel products have been on the rise for the past two years.

The recent decision may result in the country losing export opportunities. Furthermore, it may hamper the country’s overall economic activity, ISA noted.