India Raises Flat Steel Import Duty to 7.5%

Indian Finance Minister, Pranab Mukherjee, recently stated in his 2012 financial budget that import duty on flat steels for manufacturing autos, refrigerators, air-conditioners and so on will be increased from 5% to 7.5%.

The increase margin is lower than the margin of 5% suggested by Indian Ministry of Steel and the associated Chambers of Commerce and Industry of India. The budget will also lower the import duty on iron-ore mining machinery to 2.5%.

India increases the import duty on flat steels so as to push up its demand for homemade steels, which will benefit Tata Steel, Steel Authority of India Limited (SAIL) and JSW Steel Ltd.

An analyst said that, after the benchmark interest rate of Indian Central Bank reached highest since 2008, Indian steel plants have been struggling with sluggish demand. This time the duty increase will contribute to relieving the impact of imports on its local market, having its local steel plants compete with foreigners at the same level.

According to statistics of Indian Ministry of Steel, during the previous 11 months till this February, Indian steel consumption has increased by 5.2%, reaching 62.8 million tons, however increased 10% over the same period last year; its steel imports (mainly flat steels) are increased by 3.2%, reaching 6.2 million tons, however dropped 10% last year.