The government on Saturday waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices.
What analysts say on how export duty on steel will impact domestic market in India?
Suren Goyal, Partner, RPS Group
The waiver of customs duty on the import of a few unrefined substances utilized by the steel business will have a likewise effect. The rejecting of import obligation on pet will add add to the intensity of the manufacturing and export area and will additionally push esteem for the send outs from the country. These proactive measures will likewise facilitate the coordinated operations pressure and cut down the cargo bill of the nation as sometimes a similar raw material was being traded from the nation and thusly being imported by the downstream clients.
Anurag Goel, Director, Goel Ganga Developments
Previously, the domestic market witnessed a rise of 7-8% in the input cost which was taking a toll on the developers. The government has found a significant way to defeat these difficulties, with bringing down of tax collection on resulting in lower costs as regarding the supply network. Additionally, decrease in import duties on three critical unrefined substances for steel creation and three inputs for making plastic things, will assist with lessening cost of creation thus, influencing cost of steel and plastics which are required for development. This move shall see the much needed relaxation which was needed for the country’s in-house real estate market. Not only will it curb down the ascent of 7-8% of inputs costs but will also being about a rise in the existing supply chain network.
Ravi Singhal, Vice Chairman, GCL securities Limited
This will have a negative impact on the steel industry. However, the auto, construction, and property sectors, as well as many other industries, will benefit from this because prices will be significantly reduced. As we can see, Indian steel manufacturers are still not competitive with global manufacturers, which may lead to increased dumping in the future.
Also, China is still under martial law, so it will take some time. However, demand remains high, so the market can only have a 10% impact.
Manoj Dalmia-Founder and Director-Proficient Equities Limited
The finance ministry has planned to levy export duty on iron ore and steel while reducing the import duty on coal, ferronickel a major raw material for steelmakers. This will control the prices in the domestic market, bringing down some costs and improving margins however, might not be good for steelmakers who tend to make higher margins on exported steel. There is a 15% export duty on steel, whereas iron ore will attract a 50% duty. Many manufacturing industries like Auto, construction and heavy equipment are to benefit from this.
