Indian stainless steel producers seek scrapping of import duty on ferronickel and scrap in national budget

Indian stainless steel producers seek scrapping of import duty on ferronickel and scrap in national budget

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Indian domestic stainless steel producers have sought “curative measures” in the national budget scheduled to be placed before India’s parliament early next year, including the scrapping of import duties on ferronickel and stainless steel scrap, the Indian Stainless Steel Development Association (ISSDA) has said in a pre-budget memorandum submitted to India’s finance ministry.

At present, the basic import duty on ferronickel and stainless steel scrap is 2.5 percent with the ISSDA pointing out that India is hugely deficient in nickel ore and that there is almost no domestic production of ferronickel, forcing stainless steel producers to be dependent on imports.

The ISSDA said in the memorandum that India procures the bulk of ferronickel from non-Free Trade Agreement (FTA) countries. Even within the FTA countries, a zero rate is applicable only to imports from ASEAN countries and hence not applicable in case of India.

Further, FTA partner countries like Japan and South Korea are themselves net importers of ferronickel given their substantial stainless steel manufacturing capacities. The reduction of basic customs duty on ferronickel will not harm any domestic industry, the ISSDA said.

As regards stainless steel scrap, the ISSDA said that its availability in the country is extremely limited and the bulk of the stainless steel scrap requirements has to be compulsorily imported. Almost 75 percent of the stainless steel scrap requirements of the country has to be met through imports.

Despite India being highly import-dependent on inputs at higher costs, the country continues to be the second largest producer and consumer of stainless steel. According to the ISSDA, demand for stainless steel in the country is growing at a compounded annual growth rate (CAGR) of 8-9 percent across applications and the Indian per capita consumption is 2.5 kg, against the global average of 6 kg, the association said.

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