The Hindu Business Line : Steel makers unhappy over import duty cut

While imports currently are extremely low because the average domestic steel prices are lower than the ruling international prices, the primary steel makers, in general, feel that it is unlikely to have any immediate impact on the market situation.

Cautious, however, in their reaction, a spokesman for the largest private sector steel producer, Tata Steel, said that the company would not react directly but its views are the same as that expressed by the Indian Steel Alliance (ISA). The ISA had said that the five per cent protection will not suffice to protect the domestic industry in the long run if global prices come down and the need of the hour is a long-term solution.

The spokesman for Steel Authority of India Ltd (SAIL), however, said that the company believed in stability in the steel market. "The announcement is quite all right with SAIL. This is expected to help better availability of steel in the domestic market," he said.

A spokesman for Essar Steel said that the move would work as a deterrent to the expansion plans chalked out by the steel companies. "This will not have any immediate impact on the prices because of contractual agreements. But the company's effort to export the surplus steel in the domestic market will also face problems as the export realisations will come down," he said.

Ispat Industry officials said that the trigger to cut duties was possibly the rising inflation but steel is not the contributing factor. "For the past six months, there has been no increase in hot-rolled steel prices. It is the raw material prices like that of iron ore which contributed to the rising of wholesale price index (WPI). By allowing cheaper steel imports, investments in the steel sector would be forced to turn unviable. The Government should reconsider to restore import duty on steel, reduce excise duty and cut duties on raw materials like sponge iron, pellets, ferro-alloys, zinc and refractories," he said.

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