In line with requests from the local steel industry, the Indian government increased import duties on flat and long steel products, as per provisions of the federal budget 2015-16 placed before the Indian Parliament on Saturday, February 28, 2015.
In the budget, Indian finance minister Arun Jaitley proposed that import duty on long products currently at five percent and that on flat products at 7.5 percent will both increase to 10 percent.
The hike in import duty is in reaction to the spurt in imported steel products in the country, which stood at 8.1 million mt during the April 2014-January 2015 period, with shipments from China alone accounting for 3 million mt, a government official said.
The budget also provided for a peak custom duty rate of 15 percent that will give the government headroom to further increase duties on steel imports in course of the financial year, in case of an unabated increase in import shipments, the official said.
Under the new budget, the duty rate on coal has been doubled to INR 200/mt ($3/mt) collected for funding the development and promotion of clean energy. The duty rate both applies to coal mined in
India and imported coal.
"Demand for steel products in the domestic market is weak and cost of production is likely to go up owing to duty on coal levied in the budget. Steel product prices are therefore expected to remain unchanged as least during March," Seshagiri Rao, joint managing director of Indian steelmaker JSW Steel, said.