Currently, ferro-nickel and stainless steel scrap attract basic customs duty (BCD) of 2.5 per cent
On January 1, 2020, the price for same grade of HRC in the Mumbai wholesale market was Rs 37,500 per tonne. The current price is higher by 55%.
Ahead of the Budget, the Indian Stainless Steel Development Association (ISSDA) has urged the government to remove import duty on ferro-nickel and stainless steel scrap. Currently, ferro-nickel and stainless steel scrap attract basic customs duty (BCD) of 2.5 per cent. In its recommendations to Finance Ministry for the upcoming Budget for financial year 2021-22, ISSDA has also sought removal of import duty on graphite electrodes.
ISSDA said “it has appealed to exempt the 2.5 per cent BCD levied while importing key raw materials, including ferro-nickel and stainless steel scrap”. At present, both the raw materials are unavailable in the country, making their import mandatory, it said. Removal of duty on ferro-nickel and stainless steel scrap is a long-standing demand of the industry. The Ministry of Steel has also at times batted for zero duty on these items.
Stainless steel industry meets the bulk of its nickel requirements through ferro-nickel and stainless steel scrap route. ISSDA has also sought removal of existing 7.5 per cent import duty on graphite electrodes, a critical component in stainless steel manufacturing which constitutes a major share of input cost. Besides, it has sought an increase in import duty on stainless steel flat products to 12.5 per cent to bring it at par with carbon steel products and check undue imports.
These measures will not only boost domestic manufacturing but also curb “undesired” stainless steel imports, it said. ISSDA President K K Pahuja said, “Stainless steel industry is ready to contribute to the ‘Atmanirbhar Bharat’ vision. This is the optimum time for the government to stop considering essential raw materials as a source of revenue and provide stimulus to domestic manufacturing by exempting duties on importing critical raw materials.”
The suggested measures, if taken, will improve the competitiveness of the domestic industry and in turn, provide impetus to the MSME segment, which has a 40 per cent share in the domestic stainless steel industry, he added. Additionally, undue imports have harmed the domestic industry which is operating at 60 per cent of its capacity and is financially stressed after COVID-19 related disruptions, Pahuja said. “We request the government to rationalize the duty structure in order to catalyze the revival of this sector that has immense potential to generate additional jobs,” he said.