The Indian Steel Minister Ram Vilas Paswan has asked the Indian Prime Minister Manmohan Singh to withdraw the duty entitlement pass book (DEPB) scheme so as to influence domestic steel producers who have been raising their prices despite several appeals made by the government.
According to Mr. Paswan, in the event of the cancellation of the DEPB scheme, exports of steel products will seem less attractive for the country's steel producers.
Mr. Paswan also pointed out that increasing steel exports have created a shortage of steel inside the country, leading to a rise in domestic prices. For instance, during the last month alone domestic steel producers increased prices for various steel products by Rupee 3,000-4,000/mt ($74-99/mt).
As part of other possible fiscal measures, the minister has proposed to remove import duties so as to allow the free flow of steel into the country, and has also proposed the imposition of a 10 percent duty on steel exports.
Currently, Indian steelmakers enjoy DEPB benefits of five percent for galvanized steel, four percent for billets, six percent for thermo-mechanically treated bars, four percent for hot rolled coils and six percent for cold rolled coils.