The Hindu Business Line : Export duty on steel may not improve domestic supplies, say producers

New Delhi, April 30 The imposition of export duty on iron and steel products may not yield the desirable increase in the domestic market’s availability of steel.

This was the mood among steel manufacturers after the Finance Minister announced a slew of fiscal measures aimed at checking rising steel prices.

Welcoming the move, the President of the Indian Steel Alliance (ISA), Mr Moosa Raza, said “We support the Government in all actions that help control inflation. However, ISA is not very sure whether imposition of export duty will add significantly to the availability of steel in India.” However, he also pointed out that the export duty may be a short-term measure and Indian suppliers to overseas buyers would not like to lose their long-term market by dishonouring commitments and there are also EPCG obligations.

“The net effect may be the margins of the Indian steel industry may be affected , without significantly adding to the overall availability,” he said.

The Director of Essar Steel Holdings, Mr J. Mehra, said, “The Government’s move to impose export duty on steel is an attempt to solve the immediate problem with serious implications.”

“On long-term supply management issues, unless the Government takes definite initiatives in facilitating additional steel making capacities, measures taken (as of now) are counter productive as they reduce the capabilities of the steel companies to plough back and increase steel capacities which is the need of the hour,” he said.

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