The implementation of the goods and services tax (GST) will bring down the cost of inputs as raw materials like iron ore, manganese and coal have been kept under the lowest slab of 5%, the government said on Tuesday. “The GST regime is good for the steel team as the goods & services tax rates and slabs for raw materials like iron ore, manganese, coal etc is in the bracket of 5 %. The industry will see a reduction in the input cost for steel-making with the implementation of GST,” steel minister Birender Singh said.
Cheaper raw material is the key for the country to achieve a 300-MT steel production target from around 126 MT now. India became the third-largest producer of crude steel in the world in 2015, leaving the US behind and is now on the verge of becoming the second-largest producer toppling Japan. India added 16.5-MT crude steel capacity during the past three years.
Talking to reporters on the achievements of the ministry in the last three years, Singh said his ministry was aiming to take the exports figures to double digits. In 2016-17 India became net exporter of steel with 8.2 MT of exports, registering a 102% growth over the previous fiscal. During the same year, imports were reduced by 37% to 7.42 MT.
Efforts are on to increase the contribution of the sector to the GDP from the current 2%, the minister said. Singh further said the proposed joint venture (JV) between ArcelorMittal and SAIL is in final stages and may be finalised within this month. The two had in 2015 inked a pact to set up a Rs5,000-crore auto-grade steel plant in India.
The proposed JV will construct world-class facilities that will offer technologically advanced steel products for India’s rapidly growing automotive sector. The proposed plant is likely to come up in one of the major auto clusters.
Responding to a question, he said the iron ore prices would not be capped, but profiteering would not be allowed by the mining firms.
The steel minister also said India is heading towards becoming the second-largest steel producer in the world. “The Indian steel sector was not what it is today. There was loan stress on it and it was a matter of serious concern for the banking sector and the RBI. We took steps in this direction to improve the situation,” he told reporters at an event to mark three years of the NDA government.