Buoying the domestic steel industry, Finance Minister, Pranab Mukherjee has proposed increasing the import duty on flat-rolled steel to 7.5 per cent and reducing duty on plant and machinery imports for iron ore beneficiation to 2.5 per cent.
He also announced reduction of basic customs duty on coating material for the manufacture of electrical steel from 7.5 per cent to five per cent; and nickel ore and concentrate and nickel oxide from 2.5 per cent or 7.5 per cent to nil. He also enhanced export duty on chromium ore from Rs. 3,000 per tonne to 30 per cent ad valorem. He also proposed enhancing the basic customs duty on non-alloy, flat-rolled steel from five per cent to 7.5 per cent. This was a long pending demand of the steel industry and would discourage imports and go a long way in protecting the interests of the domestic industry.
Lending an ear to the demand of the domestic steel industry for a blanket ban on iron ore exports, the government has increased duty on iron ore exports to 30 per cent for all kinds of iron ore within a year from as low as five per cent. “To encourage enrichment of low-grade iron ore, of which we have huge reserves, I propose to reduce basic customs duty on plant and machinery imported for setting up or substantial expansion of iron ore pellet plants or iron ore beneficiation plants from 7.5 per cent to 2.5 per cent,” he added.
Reacting to the developments, Steel Authority of India Limited (SAIL) chairman, C.S. Verma said the thrust on infrastructure paints a bright scenario for the steel sector conducive for growth of the steel industry. Increase in customs duty for flat carbon steel, reduction in import duty for equipment required in mining and minerals sector are all measures which are positive for steel industry, he added. “It is a pragmatic and growth-oriented budget with concrete steps for containing fiscal deficit at a realistic target of 5.1 per cent for 2012-13,” he said.