On Wednesday, June 8, India's steel minister Virbhadra Singh ruled out any hike in import duty on steel products but promised to protect the interest of domestic steel producers by restricting iron ore exports.
Speaking on the sidelines of a conference organized by the Association Chambers of Commerce and Industry of India, Mr. Singh told the press, "India has no immediate plan to hike the five percent import duty on steel. However, we are closely watching the situation and there is no case for an increase in import duty. If in future we think that intervention from the government is necessary, we will think about it."
According to Mr. Singh, India's steel imports have declined by 5.3 percent to 1.41 million mt from 1.49 million mt in the April-June period of the current fiscal year compared to the year-ago period.
As SteelOrbis previously reported, the Indian steel industry has been asking the Indian government to increase the import duty on steel imports from five percent to 20 percent due to cheap imports of steel and declining consumption of local steel by domestic users.
On the other hand, Mr. Singh revealed that the Indian government intends to restrict exports of iron ore to overseas countries, including China, to enable its optimal use by domestic steelmakers, and will only encourage ore exports in value-added form.
"The emphasis of the future steel policy of the government would be to discourage and restrict exports of iron ore just as China reserves its iron ore for its own industry and the US continue to preserve reserves of its crude," Mr. Singh said.
Mr. Singh added that in future, iron ore exports would be encouraged only in value-added form and that too by a limited quantity so as to bring higher foreign exchange into India, stating that the government would ensure that its reserves of iron ore were fully utilized by domestic steel makers.
In mid-June, India's steel ministry proposed to the finance ministry the imposition of a 15 percent export duty on iron ore lumps and fines. India currently imposes no export duty on iron ore lumps while shipments of iron ore fines are subject to a five percent duty.
Referring to Orissa High Court's recent decision to extend the status quo order on the granting of a mining license by India's central government for the Khandadhar iron ore mines until August 5, 2009, Mr. Singh said India will speed up the process of granting iron ore mining licenses to various steel companies, including South Korean steel giant POSCO.
"We are planning to almost double the production of steel and for that we have to speed up greenfield projects," he said.
In relation to POSCO which has been waiting for four years to secure raw material for its proposed $12-billion plant in Orissa, the Indian minister said: "We are looking into the matter and will get this done as soon as possible. We are working with the state government to expedite the matter."
As SteelOrbis recently reported, POSCO has faced opposition in Orissa on the issue of land acquisition.