Budget expectations 2021: Steel
ECONOMY & POLICY

Budget expectations 2021: Steel

The Indian stainless steel industry has urged the government to slash the existing import duties on key raw materials in the upcoming Union Budget 2021-22. In its recommendations to the Ministry of Finance, Indian Stainless Steel Development Association (ISSDA), the apex body representing the domestic industry, has appealed to exempt the 2.5% Basic Customs Duty (BCD) levied while importing key raw materials, including ferro-nickel and stainless steel scrap. Currently, neither of these raw materials is available in the country, necessitating their import.

ISSDA has also sought abolition of the existing 7.5% import duty on graphite electrodes, a critical component in stainless steel manufacturing, as they constitute a major share of input cost. Additionally, ISSDA has sought an increase in the import duty on stainless steel flat products to 12.5%, to bring it at par with carbon steel products, in order to check undue imports. ISSDA asserted that these measures, if undertaken, will not only boost domestic manufacturing but also curb undesired stainless steel imports, thus spurring the ‘Make in India’ movement.

The government has set in motion a wave of reforms to boost economic growth and the Indian stainless steel industry is ready to contribute to the ‘Atmanirbhar Bharat’ vision. This is the optimum time for the government to stop considering essential raw materials as source of revenue and provide stimulus to domestic manufacturing by exempting duties on importing critical raw materials. This step will improve the competitiveness of the domestic industry and in turn, provide impetus to the hard hit MSME segment, which has a 40% share in the domestic stainless steel industry. Additionally, undue imports have harmed the domestic industry which is operating at 60% of its capacity and is financially stressed after COVID-19 related disruptions. We request the government to rationalise the duty structure in order to catalyse the revival of this sector that has immense potential to generate additional jobs.

India continues to be the second largest producer and consumer of stainless steel in the world. High input costs, coupled with imports from FTA countries, have eroded the global competitiveness of Indian companies. Undeterred by trade challenges, the Indian stainless steel industry has consistently demonstrated 8- 9% growth in the past few years, as compared to about 5% exhibited globally.

This growth was made possible due to capacity building and modernisation initiatives undertaken over the last 15 years, along with aggressive market development efforts by the industry. The demand for stainless steel in India is growing at a compound annual growth rate (CAGR) of ~8-9% across a spectrum of applications. Moreover, a lower per capita consumption of stainless steel at ~2.5 kg against the world average of 6 kg highlights an immense untapped potential for stainless steel usage in India. Stainless steel provides sustainable solutions with lower lifecycle costs across diverse applications, such as public transport, buildings and construction, process industries, and food processing etc.  

Author: KK Pahuja is President, Indian Stainless Steel DevelopmentAssociation (ISSDA).

The Indian stainless steel industry has urged the government to slash the existing import duties on key raw materials in the upcoming Union Budget 2021-22. In its recommendations to the Ministry of Finance, Indian Stainless Steel Development Association (ISSDA), the apex body representing the domestic industry, has appealed to exempt the 2.5% Basic Customs Duty (BCD) levied while importing key raw materials, including ferro-nickel and stainless steel scrap. Currently, neither of these raw materials is available in the country, necessitating their import. ISSDA has also sought abolition of the existing 7.5% import duty on graphite electrodes, a critical component in stainless steel manufacturing, as they constitute a major share of input cost. Additionally, ISSDA has sought an increase in the import duty on stainless steel flat products to 12.5%, to bring it at par with carbon steel products, in order to check undue imports. ISSDA asserted that these measures, if undertaken, will not only boost domestic manufacturing but also curb undesired stainless steel imports, thus spurring the ‘Make in India’ movement. The government has set in motion a wave of reforms to boost economic growth and the Indian stainless steel industry is ready to contribute to the ‘Atmanirbhar Bharat’ vision. This is the optimum time for the government to stop considering essential raw materials as source of revenue and provide stimulus to domestic manufacturing by exempting duties on importing critical raw materials. This step will improve the competitiveness of the domestic industry and in turn, provide impetus to the hard hit MSME segment, which has a 40% share in the domestic stainless steel industry. Additionally, undue imports have harmed the domestic industry which is operating at 60% of its capacity and is financially stressed after COVID-19 related disruptions. We request the government to rationalise the duty structure in order to catalyse the revival of this sector that has immense potential to generate additional jobs. India continues to be the second largest producer and consumer of stainless steel in the world. High input costs, coupled with imports from FTA countries, have eroded the global competitiveness of Indian companies. Undeterred by trade challenges, the Indian stainless steel industry has consistently demonstrated 8- 9% growth in the past few years, as compared to about 5% exhibited globally. This growth was made possible due to capacity building and modernisation initiatives undertaken over the last 15 years, along with aggressive market development efforts by the industry. The demand for stainless steel in India is growing at a compound annual growth rate (CAGR) of ~8-9% across a spectrum of applications. Moreover, a lower per capita consumption of stainless steel at ~2.5 kg against the world average of 6 kg highlights an immense untapped potential for stainless steel usage in India. Stainless steel provides sustainable solutions with lower lifecycle costs across diverse applications, such as public transport, buildings and construction, process industries, and food processing etc.   Author: KK Pahuja is President, Indian Stainless Steel DevelopmentAssociation (ISSDA).

Next Story
Products

Viva ACP Launches FR A1-Rated Honeycomb Panels for Fire Safety

Viva, Asia’s largest manufacturer and supplier of aluminium composite panels (ACP) introduced its FR A1-rated Honeycomb Panels, setting a new industry benchmark for fire safety and architectural excellence. Engineered to deliver exceptional performance, these panels combine advanced fire-resistance technology with aesthetic versatility, offering a revolutionary solution for safety-critical environments.The FR A1 rating represents the highest standard of fire resistance under the European Standard EN 13501-1, signifying non-combustibility and zero contribution to fire, smoke, or toxic emissio..

Next Story
Real Estate

Almal Real Estate Expands into Commercial, Global Markets

Almal Real Estate Development is soon to announce its upcoming expansion into new verticals and international markets as part of its strategic growth plans for 2030. The company, known for its innovative luxury residential and hospitality developments, is preparing to diversify into the commercial sector with the introduction of The Smart Space, a network of business centers in UAE featuring five-star amenities. Additionally, Almal is entering new markets in Bali and Thailand as a community developer, focusing on villa and townhouse projects.The expansion into the commercial real estate sector..

Next Story
Infrastructure Urban

NABARD Approves Rs 9.03 Billion for 127 Projects in Himachal

The Himachal Pradesh government has secured approval from the National Bank for Agriculture and Rural Development (NABARD) for 127 projects worth Rs 9.03 billion for the 2024-25 fiscal, Chief Minister Sukhvinder Singh Sukhu announced. During a meeting with MLAs from Kangra, Kullu, Kinnaur, Solan, Chamba, Bilaspur, and Lahaul-Spiti districts to discuss priorities for the 2025-26 budget, Sukhu said the approved projects include 50 MLA-priority schemes under the Public Works Department, valued at Rs 4.12 billion, and 23 MLA-priority schemes under the Jal Shakti Vibhag, costing Rs 1.79 billio..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?