New
Delhi

The Indian
government plans to announce a cut in import duty of steel items and bring it
to near-zero levels. The decision is expected to provide relief to MSMEs that
have been affected by the high cost of raw materials due to the raging COVID-19
pandemic. The import duties will now be withdrawn or slashed.

Indian steel
prices are expected to improve because of the stable demand for steel and
China’s move of cutting export incentives to support domestic needs. An import
duty cut will moderate prices in India while presenting competition to traders
who secure cheaper metal from abroad.

However, a report
by ICRA stated, Indian steel mills can offload large steel volumes to export
markets and remain profitable given the moderation in demand due to the second
wave of COVID-19 and the business lockdowns. But, a cut now will squeeze
margins and bring a lot of export-destined products back into the domestic
market.

The duty cuts in
steel are expected to be announced by the Directorate General of Foreign Trade
after a nod from the finance ministry. Lowering import duties will help in
maintaining supply lines that have been hit as domestic steel companies have diverted
medical grade oxygen for COVID-19 relief measures.

Source:
Business Standard

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