The government has removed customs duties on the import of certain raw materials, including coking coal and ferronickel, used by the steel industry, a measure that will reduce the cost for the domestic industry and reduce prices.
In addition, to increase domestic supply, duties on iron ore exports have been raised by up to 50%, and some steel intermediaries by up to 15%, according to a notification.
The rights changes will be effective from Sunday.
The import duty on ferronickel, coking coal and PCI coal was reduced by 2.5%, while the duty on coke and semi-coke was reduced from 5% to “nil”.
The export tax on iron ores and concentrates was raised to 50 percent from 30 percent, while that on iron pellets a 45 percent duty was imposed.
Duty on pig iron and spiegeleisen in pigs, blocks or other primary formats; flat-rolled products, of iron or non-alloy steel, of a width of 600mm or more, hot-rolled, unclad, clad or coated; Flat-rolled products, of iron or non-alloy steel, of a width of 600mm or more, cold-rolled (cold-reduced), unclad, clad or coated, Flat-rolled products of iron or non-alloy steel, of a width of 600mm or more, clad, veneered or coated has been increased to 15% of “nil” currently.
In addition, a 15 per cent duty was imposed on stainless steel flat-rolled products with a width of >= 600 mm, other stainless steel bars and rods; stainless steel angles, shapes and profiles; bars and rods, hot-rolled, irregularly wound, of other alloy steel.
Finance Minister Nirmala Sitharaman said changes to tariffs on raw materials and intermediates for iron and steel would “lower their prices”.
In addition, import duties on raw materials used in the plastics industry have also been reduced to reduce the cost of domestic manufacturing.
While import duties on naphtha were reduced from 2.5% to 1%, duties on propylene oxide were halved to 2.5%.
The import duty on polymers of vinyl chloride (PVC) has been reduced to 7.5% from the current 10%.
Announcing the reduction in tariffs on plastic, Sitharaman said levies are reduced on raw materials and middlemen where import dependency is high.
“This will lead to a reduction in the cost of end products,” she tweeted.
Rajat Mohan, senior partner at AMRG & Associates, said a sharp reduction in import duties on these products would help stop high inflation.
“Global economies are suffering due to rising debt and high inflation. In light of the collapse of weak developing economies due to high inflation, the Indian government has taken several measures to relieve the prices high gasoline, diesel, coal, iron, steel and plastic,” Mohan said.
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