Abolish import duties on coking coal and metal scrap: Steelmin to finance ministry

By: | Published: February 9, 2017 3:45 AM

Flagging the need for abolition of import duties on coking coal and metal scrap, both scarce material in the country, steel ministry has written to the finance ministry, requesting it to reconsider the proposals overlooked in the Budget.

The duty on metal scrap imports is in the range of 2.5-5%, depending upon the scrap metal.The duty on metal scrap imports is in the range of 2.5-5%, depending upon the scrap metal.

Flagging the need for abolition of import duties on coking coal and metal scrap, both scarce material in the country, steel ministry has written to the finance ministry, requesting it to reconsider the proposals overlooked in the Budget.

In the letter, it will argue that the domestic steel industry, still recuperating from its subdued state, requires these supports now and not after 2-3 years as their reliance on imports with these two materials would come down significantly and any kind of such supports would be redundant.

Though steelmakers and pig iron manufacturers mostly depend on imported coking coal to fire their blast furnaces for want of adequate supply domestically, coking coal attracts 2.5% import duty. The duty on metal scrap imports is in the range of 2.5-5%, depending upon the scrap metal.

Steel secretary Aruna Sharma, talking to FE, said with the ongoing investment in coal washeries in the country, steelmakers’ coking coal imports might come down by 30% in next three years.

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Again, replacing coking coal, more steel would be produced using gas as the feedstock. At the same time, scrap collection within the country would also be stabilised in the next two years or so reducing the need for imports of outside scrap.

While India imported 19.5 MT of coking coal in the 2010-11 fiscal, the imports went up to 43.5 MT in the last fiscal, up 123%. It generally requires 0.9 tonne of coking coal, an important raw material, to produce one tonne of steel. India imports coking coal from various countries, including Australia, South Africa and others.

Though there had been no duty on coking coal imports for several years in the past, the government had in 2014 imposed 2.5% duty, mainly to rationalise the duty structure on all varieties of non-agglomerated coal. India has over 300 billion tonnes of coal reserves, coking coal constitutes just about 10% of the total kitty and a large chunk of that remains unexplored till date.

Metal Recycling Association of India (MRAI) had also written to the finance ministry ahead of the Budget saying that they deserve better care from the government since they help the country to protect its precious natural resources even as the end product made from primary metal and the recycled metal.

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