Steel Ministry to industry: ‘Responsible pricing’ is key to continued support

Our Bureau New Delhi | Updated on January 12, 2018

Duty on raw material lowered by up to 1-1.5% under GST

The government may re-evaluate its support to domestic steel manufacturers if they do not price products ‘responsibly’.

Speaking at an Assocham summit, Syedain Abbasi, Joint Secretary at Ministry of Steel, said, “While we are willing to give protection, it comes with a sense of responsibility so please be responsible, otherwise charges of cartelisation become very difficult to fend off as prices start rising dramatically.”

Under the existing support mechanisms for the domestic steel industry, the Centre provides a minimum value addition of 15 per cent on the notified steel products to boost domestic steel consumption. The government has also continued with anti-dumping provisions to check import of cheaper Chinese steel.

Abbasi hinted that the government may withdraw protection to the industry if prices of domestic steel go beyond a certain level. He said, “It would become untenable for us to continue (with import restrictions and price preference) if you suddenly find that the prices in the next tender for GAIL pipeline have gone up by 30 per cent.”

He stated that it is not in the government’s interest to buy steel at prices which are very high. He said, “Then if people gather and say that look these controls have to go then ultimately it will be the pipe industry which will be the loser.”

Abassi said double taxation has largely been phased out under the Goods and Services Tax (GST) regime and it will be marginally beneficial for the steel sector as the duty on raw material will be lowered by 1 to 1.5 per cent.

He also noted that, the problems that were earlier created by the Railways in giving ‘way leave agreement’ to cross the slurry pipeline either underground or overhead across railway land, were solved after the Prime Minister’s Office intervention.

Published on June 13, 2017

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like