New Delhi: Ahead of the Union Budget 2017-18, the Steel Ministry has sought reduction in import duty on both coking coal and nickel -- vital components of steel making -- a move that may revive the sector, a top official said.
In an interview to PTI, Steel Secretary Aruna Sharma said the dependence on imports is particularly heavy on nickel, coking coal and gas.
"What we are discussing is whether there is need to take a re-look at their custom and import duties. This is still under discussions. Let's see how it moves out during the budget," the Secretary said.
The Steel Ministry, in its recommendations to the Finance Ministry, has sought bringing down the import duty on coking, coal, nickel and gas, Sharma said.
While the import duty on nickel is five percent, in the case of coking coal, it is 2.5 percent now.
Sharma also said that in the future, the requirement of gas will increase in the manufacturing of pellets and added, "Like what the Prime Minister has said, tomorrow's economy is going to be gas-based."
Pellets are small balls of iron ore used in steel making.
To bring down the imports of coking coal, Sharma said that her Ministry was is discussions with the Coal Ministry to invest in washeries.
"There are two ways of tackling imports. One is to replace the imports with a better alternative fuel. So, we are in discussions with Coal Ministry to invest in washeries and the Coal Ministry has agreed to invest in them so the coking coal imports will come down by nearly 30 percent which is a very good sign for the coming years," she said.
India has to heavily depend on import of coking coal, as the domestic quality has higher ash content which is unsuitable for the steel industry with present technology.
Asserting the need to go for electric-based or gas-based steel production, she said that "pellet making can easily shift to the gas-based thing if it is guaranteed at affordable prices."
"Now, with the Paris Convention, it is mandatory that we must bring down the carbon footprints. So, that is another alternative we are working on," she said.
Indian Steel Association (ISA), the industry body representing primary steel producers, has also urged the government to reduce import duty to zero on all the raw materials used for steel making.
Sanak Mishra, Secretary General of ISA said, they have also requested the government to reduce railway freight for the steel industry.
SAIL, India's largest steel maker, had recently said there is a need to develop indigenous sources of coking coal to meet requirements as the recent rise in the price of metallurgical coal was putting pressure on its operations.
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Updated Date: Jan 14, 2017 20:09 PM