The Hindu Business Line : Stainless steel industry calls for scrapping of duty on basic inputs

New Delhi, Feb. 12 The domestic stainless steel industry has called for the duty structure on basic inputs going into the manufacturing of the product to be scrapped.

In a pre-budget memorandum to the Finance Ministry, the Indian Stainless Steel Development Association (ISSDA) has suggested that the present 5 per cent duty on stainless steel melting scrap should be withdrawn.

“We have also asked the Finance Ministry to remove the duty on nickel products including unwrought nickel, unalloyed nickel, nickel oxide sinter and ferro nickel from the current level of 2 to 5 per cent,” Mr N.C. Mathur, President of ISSDA, told Business Line.

According to him, the cuts in the duty would cost the exchequer less than Rs 350 crore of revenue loss, while it would help industry earn more revenue and give it the necessary boost to invest Rs 15,000 crore to double stainless steel production by 2010. The ISSDA has also said that if the duty cuts are implemented then it would bring down stainless steel prices by Rs 5,000 to Rs 7,000 per tonne. Currently the 304 grade stainless steel made for industrial use is priced at around Rs 1,70,000 per tonne while kitchen grade steel is around Rs 1,00,000 per tonne.

“The duty cuts would also help in bringing down the price of stainless steel kitchen utensils that constitutes 70 per cent of the market for domestically produced metal,” Mr Mathur said.

The ISSDA has also sought more protection from the dumping of stainless steel by China in India. “The Association has suggested that customs on value-added stainless steel cold rolled coils (CRC) should be increased to 10 per cent so that Chinese manufacturers will not dump their products in India,” Mr Mathur said.

He added that China accounts for nearly 25 per cent of global production and with such huge capacities they have the capability to upset the global trade of stainless steel and may even resort to dumping. “So that is why we have urged the Finance Ministry to consider doubling customs duty on CRC,” he said.

India currently imports a very small quantity of stainless steel. However, with input costs rising the competitiveness of the industry is being affected.

According to estimates, imports have grown by 50 per cent from 10,000 tonnes in 2006 to 15,000 tonnes in 2007.

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