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No case for hike in import duty on steel products, says Virbhadra Singh

— PHOTO: SHANKER CHAKRAVARTY

FOR SUSTAINABILITY: Union Minister of Steel Virbhadra Singh with Sajjan Jindal (right), President of Assocham and P. K. Bishnoi (left), Chairman, Chambers’ expert committee on steel at the Steel Summit, in New Delhi on Wednesday.

NEW DELHI: Union Steel Minister Virbhadra Singh on Wednesday ruled out any hike in import duty on steel products but promised to protect the interest of domestic steel producers by restricting iron ore exports.

Mr. Singh categorically turned down the demand of steel producers for a hike in duty from five per cent to 20 per cent saying that there was no firm case for such a consideration. He, however, told reporters on the sidelines of a steel summit organised by the Associated Chambers of commerce and Industry of India that the government was keeping a watch on the situation and intervene if necessary. The function was presided over by chamber Vice President Sajjan Jindal.

The Union Steel Minister, however, said that the emphasis would be on discouraging iron ore exports for its optimal use by domestic steel producers and encouraging ore exports only in value added form to fetch higher foreign exchange for the country. He assured the producers to take up the matter with the quarters concerned in this regard.

By ensuring domestic use of iron ore reserves India could become a global hub for steel manufacturing, he said.

The country too would have to follow the same course as China reserves its iron ore for its domestic consumption and the U.S. preserves its reserves of crude.

Mr. Singh declined to commit himself on the issue of divestment of government stake in Steel Authority of India. He, however, declared that the government would restructure MSTC, Ferro Scrap Nigam, Kudremukh Iron Ore Company and Hindustan Steelworks Construction Ltd. soon on the basis of the report of the committee set up for the purpose for achieving economies of scale and vertical integration along with raw material security.

The form and nature of the restructuring of these PSUs would be decided in due course. According to Mr. Singh, the industry had come out of the shadows of the economic slowdown recording a growth of three per cent in the January-March quarter of 2009 and 3.4 percent growth in steel production in the first quarter of the current financial year.

He was confident that steel consumption too would grow between 6 and 8 per cent during the current financial year given the government’s stress on development of infrastructure and rural development schemes. This would provide a stable market for steel, particularly TMT bars, structural steel and items of mass consumption.

The Ministry has decided to increase the production capacity to 124 million tonnes by 2011-12. He said several MOUs had been signed for investment in the steel sector and promised to remove procedural bottlenecks and simply the procedures to ensure their early fructification.

Mr. Sajjan Jindal is President, ASSOCHAM. The second paragraph of a report "No case for hike in import duty on steel products, says Virbhadra Singh" ("Business" page, July 9, 2009) called him "chamber Vice President".

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