In order to protect the interests of the domestic industry, the Budget needs to revisit last year's hike in excise duty and take steps to discourage dumping of products, Tata Steel's managing director HM Nerurkar said in his Budget wish-list.
The government had in the Budget for the current fiscal enhanced the basic customs duty on non-alloy, flat-rolled steel from 5% earlier to 7.5%. It also hiked the excise duty at the same time. Nerurkar said the duty hike on steel imports is needed as the volume of shipments has increased by a whopping 40% in the first six months of the ongoing fiscal.
In line with the government's policy of reducing import duty for raw materials for making steel, the import duty on steel grade limestone, dolomite (which is presently 5%) and iron ore (which is currently 2.5%) should also be reduced to zero, he added. Jindal Steel and Powers MD and CEO Ravi Uppal asked the government to take steps to discourage dumping into India as this would destroy the potential of the domestic steel industry.
No dumping should be allowed in steel in India. The main challenge is China. They produce 750 million tonne of steel and can easily dump it in India. If that happens, the baby (Indian steel industry) will die in its cradle, he said.
Dumping in international trade means export by a country of a product at a price that is lower in the foreign market than the price charged in the domestic market.
The domestic steel capacity has to be protected and we project that from under 100 million tonne per annum (mtpa), it will rise to 130 MTPA by 2018. This will make India the second-largest steel maker in the world from its current fourth position, Uppal added.
Uppal said there is a need to stimulate the demand as it has slowed down due to less infrastructure spend.
Even future capacity expansion has been affected due to the slowdown in mining activities in states like Karnataka, Goa and parts of Odisha, he said.
Both of them also urged the government to clear hurdles such as delays in project approvals and environment clearances to enable the domestic steel sector to grow.
The Indian steel industry is facing problems due to shortage of iron ore and continued delays in project approvals. The industry will benefit from proactive action on these fronts in the Budget, Nerurkar said.