Tata Steel Warns of Revision in Output Targets Due to Export Tax

SEATTLE (Scrap Monster): Leading Indian steelmaker Tata Steel announced that the government’s recent decision to impose export tax on certain steel products could force the company to review its previously announced production targets, if it remains in place for a long time.

T.V. Narendran, Chief Executive Officer, Tata Steel noted that the imposition of export tax on steel products could hit the steel industry over the longer term, while being well aware of the rising inflationary pressure that has forced the government to do so.

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The company had earlier announced plans to double its Indian steelmaking capacity from around 20 million tonnes per annum (mtpa) to 40 mtpa. However, the expansion plans were based on the assumption that 10-15% of that would be exported. If the export tax persists for a long time, the company will have to revisit the capacity expansion plans, in such a way that the expansion will be limited to what is needed for the domestic market.

Meantime, he said that Tata Steel plans to hold talks with the government to reach a consensus situation, which will address the concerns of both the government and the industry in a fair manner.

Earlier, the Indian Steel Association (ISA) had warned that the government move may impact projects under the PLI scheme, send negative signal to investors and impact capacity expansion projects.