The Hindu Business Line : Steel: `Govt may cut import duty if necessary'

THE Union Government may reduce the import duty on finished steel products if the domestic producers increase prices above international levels, according to Mr B.K. Tripathy, Union Minister of State for Steel. He was talking to the newspersons after inaugurating the 41st National Metallurgists' Day and 57th Annual Technical Meeting, both organised by the Indian Institute of Metals.

At present, the peak import duty on steel products in India is 30 per cent. The Minister said if the consumers feel that domestic producers were not offering a competitive price compared to the international players, then the import duty may be reduced.

He, however, clarified that the Union Government would not interfere in the pricing of steel products in India. "We have got nothing to do with the steel prices. It is a free market and market forces will determine the price", Mr Tripathy said.

In this context, he said in the near future there would not be any need to reduce the import duty on steel. "I feel that it will not (reduction of import duty) be required", he said.

The Minister accepted that there were some anomalies in the excise duty structure of the steel industry. According to him, in some places both the raw material and the finished products were burdened with the excise duty.

"Still, what's the harm? Let the steel industry pay back to the Government. Financially, the industry is doing extremely well. When the industry was suffering we were considering correcting the anomalies", he said.

Regarding the mining of chrome ore in India, the Minister ruled out any further increase in the upper limit as there was a shortage of chrome ore reserves in the country.

The Union Government has recently allowed import of seconds and defective steel items, which is mainly used by the secondary steel producers. Necessary notification has been used in this month, the Minister said.

Earlier, while delivering his inaugural address, he said the Indian steel industry registered a strong growth of 7.4 per cent in the first two quarters of the current financial year compared to the corresponding period of the previous fiscal.

Indian steel production in 2002-03 was 33 million tonnes. The Minister was "sanguine" that in the current financial year production will touch the 35-million-tonnes mark.

"The increase in exports during the first six months of the current year grew by 35.7 per cent. Neither the sluggish global economic recovery nor the rise of protectionism - major features of international trade market in 2002-03 - could deter Indian steel trade creating a record growth of 37 per cent", he said.

According to him, manufacturing, construction and gas, electricity and water were the key sectors, which can propel the growth of steel industry much above the average rate of six per cent per annum.

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