Seen as the 'needed' relaxation to some key areas facing the ripple effects of the international monetary crisis, the government has make a declaration of providing some sort of relief to the steel industry. The statement, released by the finance ministry, has stated that it has been unanimously decided to abolish the export duties on some iron items after it has witnessed the fall on the global front. The government's decision will be applicable on iron and steel ingots, pig iron, bars and rods, sections, angles. However, no change of export duty has been taken place in the context of scrap. Earlier 15 per cent export duty was levied on all such items. Add to it, now the 15 per cent ad valorem duty on the iron ore (lumps and fines) has been replaced with the particular duty of Rs.200 PMT, which will be chargeable on fines only. The export rate on the iron ore lumps will also remain unaffected with the recent declaration. The said move is said to bring some sort of relief to the already stressed iron and steel industry due to the financial crisis crunch. Finance Minister Mr. P Chidamabaram said that such withdrawal has been concluded with an aim of keeping enact the competitiveness of the iron and steel industry due to the wake of decreasing of their prices on the global map. Further he added that "In order to ensure that value-added products continue to be exported, taking into account the international prices, we think this is the appropriate time to remove export duty"
The expert analysts has said that such government move is taken with an aim of bolstering and securing the domestic ferro-molybdenum and ferro-vanadium industry. With the falling of the inflation, such decision of removing the curbs has been taken place. The fallout of around $700-800 per tonne in the steel prices has been noticed in the international arena. Earlier it was reach at peak of over $1,400. Mr. Amit Mitra, Secretary-general of the Federation of Indian Chambers of Commerce and Industry candidly asserted that “Steel prices have shown a downward trend in the last one month and the contribution of steel to inflation has also declined.” In 2008 during the month of may the steel and iron products export duty was introduced. The official statement has stated that the decision was made due to the reason that the iron ore fines prices at the international level"has gone down substantially making their exports unremunerated". Some of the quick relief measures are-
- The export duty on pig iron, iron and steel ingots, bars and rods have been replaced.
- Duty on scrap metal does not change.
- No change in the ad valorem duty on iron ore lumps.
- Ad valorem export duty on iron ore fines of 15% is now become flat duty of Rs.200 per metric tonne.
