Our Bureau

Mumbai, Feb. 28

THE Budget proposal to reduce 5-10 per cent customs duty on select base metals will not have any major impact on the domestic prices as the market has already discounted this news, trade sources said.

``The duty reduction will have hardly any impact in market due to the hike in price in international market for all non-ferrous metals,'' Mr Rohit Shah, President, Bombay Metal Exchange, told Business Line.

``Prices are ruling firm in the LME market. I expect prices will continue to rule higher and fresh industrial demand will come up in the next month. Also, stockists may enter into the market after the Budget announcement,'' a leading trader said.

The overall Budget is good. Finance Minister has not considered long time demand of trade and industries for differential duty between raw materials and finished products, Mr Shah said.

The trade expected a minimum difference of at least 15 per cent between the imported finished products and the raw materials. The import duty on finished products, i.e. copper tubes are currently lower than import duty levied on raw materials such as copper cathodes.

``The SSI units will be in trouble and will have to face very thin competition against the import of finished goods from overseas,'' he said.

Our New Delhi Bureau adds: Reacting to the Budget proposals for the mining industry, Mr Anil Agarwal, Chairman of the Vedanta Group that controls Sterlite Industries, Balco and Hindustan Copper, said, "India has a huge potential in the mining sector and the Finance Minister's proposal to increase foreign direct investment (FDI) in the mining sector is a positive move and definitely a step forward to put India on the global metals and mining map."

"However, this needs to be complemented with simplified procedures and a single window clearance for attracting FDI into India," he said.

(This article was published in the Business Line print edition dated March 1, 2005)
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