Industry & Economy
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Coal
`Duty cut on non-coking coal will not raise imports'
Our Bureau
New Delhi
,
Jan. 8
THE reduction in customs duty on non-coking coal from 25 per cent to 15 per cent announced by the Government on Thursday is not likely to open the floodgates of imports into the country.
"Customs duty is only a part of the cost of coal. Transportation costs, the location of the user and international prices are other critical factors that make up the cost. We do not see any major increase in imports because of the duty cut," a senior Coal India Ltd official told Business Line.
Inland transportation charges are still on the higher side and it makes sense for only coastal cement or power units to import coal.
"With the Government allowing captive mining, several large users are already setting up their plants next to coalfields. So there is no question of imports for them. For the smaller users, the higher transportation costs would continue to be the main factor," the official said.
While the Railways have been reducing the haulage tariffs, they are still on the higher side, according to the industry. Coal accounts for nearly 45 per cent of the Railways' freight business, a large part of which is almost a captive market.
In value terms, the country imports a little over $500-million worth of non-coking coal. In volume terms, the imports are in the region of about 15 million tonnes.
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