The Indian government’s decision to impose 15 percent export tax on finished steel products “was a kneejerk reaction which came as a shock to the domestic steel industry,” the Indian Stainless Steel Development Association (ISSDA) said in a statement on Tuesday, June 21.
“The kneejerk action of imposing 15 percent export duty came as a shock to the domestic steel industry, which was charting new capex plans to meet the government's ambitious target of doubling steel capacity to 300 million mt by 2030,” ISSDA president K. K. Pahuja said in a statement.
The government's objective behind the move was to cool down steel prices, which in any case had been coming down.
The impact of the export duty on the stainless steel industry was much harsher and unwarranted as, in the case of flat rolled products of stainless steel of width 600 mm or more (HS Code 2019), the government had already revoked countervailing duty on imports from China and Indonesia since February 2021, facilitating a free flow of subsidised stainless steel flat products from Chinese companies, the ISSDA said.
The imports from these two countries reached an all-time high of 772,000 mt in FY 2021-22, constituting over 25 percent of domestic consumption. Indian stainless steel manufacturers have been trying to tackle this unfair competition from Chinese companies by raising exports, it said.
Indian stainless steel producers have been facing protectionist measures, quotas and anti-dumping duty in Europe, Section 232 duty of 25 percent in the US, and now an export duty of 15 percent has resulted in the squeezing out of domestic producers from all markets, while the Chinese have a free run in the Indian market, the ISSDA said.