Guwahati: The government eliminated customs duties on the import of several raw materials needed by the steel industry, including coking coal and ferronickel, on Saturday, lowering costs for the local sector and prices.

Imposing export duties on steel products will send a negative signal to investors and have a negative impact on capacity expansion projects under the PLI scheme, steel industry participants said after the government removed customs duties on raw materials and raised export taxes to keep local prices in check.

In addition, to improve domestic availability, the tariff on iron ore exports was raised to 50%, and on a few steel intermediates to 15%, according to a notification.
The Indian Steel Association (ISA) stated in a statement that the sector appreciates the reduction of import duties on coking coal and a few other input raw materials.

"However, imposing an export levy on steel will simply send a negative signal to steel investors and will have a detrimental influence on capacity utilisation in the sector." Over the last two years, India has increased its engineering and steel exports and has the potential to become a part of a wider global supply chain.

"India may now lose export prospects, and this judgment may have an impact on the country's total economic activity," the group stated. Furthermore, the application of export duties would assist other nations in increasing their share of the global market, which India would leave. Regaining a lost position may take a long time since the supply chain will be interrupted, while India's reputation as a reputable supplier will suffer, according to the ISA.

According to the organisation, "the steel industry in India has made the greatest investment pledges, ranging from 36% to 40% of the overall investments promised by the whole manufacturing sector." These investments in capacity development are required to realise the Atmanirbhar Bharat Vision. "In light of this ruling, new capacity creation may be impacted since they will be viewed as uneconomical, impacting the much-anticipated investment against the PLI plan for specialty steel." Furthermore, it may have a long-term influence on the whole supply chain. The economic activity of a few states that rely on minerals and steel will be harmed further.

"These steps must be debated on before a calibrated approach can be implemented." "The steel industry remains devoted to nation-building," according to the group.