India’s Ministry of Steel has made a fresh submission to its counterparts in Ministry of Finance seeking a reduction of import duty on coking coal to nil from existing 2.5 percent, a senior government official said on Friday, August 24.
He said that scrapping of the import duty on coking coal is warranted by the sharp depreciation of the Indian rupee which has breached the INR 70 a dollar mark sharply increasing the landed price of the critical steel making input and imposing fresh ‘cost push’ burden on local steel mills.
The Ministry of Steel made a similar representation to the Ministry of Finance, last February just ahead of preparation of the national budget for 2018-19 but it had been ignored, the official said.
However, he said that the trade dynamics like international price of coking coal and exchange rate of the local currency changed dramatically since then and hence the renewed bid to get the import duty reduced to nil.
He said that supply of coking coal from domestic mines is expected to remain stagnant in range of 19-22 million mt, while total demand is expected to increase to 58 million mt by 2023, up from 47 million mt in 2017-18.
Given that shortage of domestic supplies of coking coal has been forecast to sustain in the long term, reduction in import duty is imperative to insulate local steel mills from steadily rising landed cost of the input and ensure stability in domestic prices of finished steel, the official added.