The Hindu Business Line : Customs duty on ferro alloys may be raised

New Delhi, Feb. 23 The Union Government could look at increasing the import duty on ferro and noble alloys from the present 5 per cent to 7.5 per cent in this year’s Budget to protect the domestic industry.

“Last year, the import duty on ferro and noble alloys was reduced to 5 per cent. But with threats of large scale dumping from China, South Africa and Ukraine, the Steel Ministry has urged the Finance Ministry to consider increasing the duty by 2.5 percentage points this year,” an official told Business Line.

It is also learnt that that the country’s Rs 5,000-crore ferro alloys industry has demanded a hike in the import duty and has written to the Finance Ministry in this regard. “The Indian Ferro Alloy Producers’ Association (IFAPA) has written to the Government that despite utilising around 62 per cent capacity, the domestic industry mines around 3.25 million tonnes of ferro and noble alloys, running into overproduction. If the pace of cut in import duty does not decline, the resultant dumping would lead to a huge outgo of foreign exchange and backwardness to the domestic industry,” Mr Ashim Saraf, Joint Managing Director, Facro Alloys Ltd said.

As per estimates, imports have increased by over 165 per cent in the last three years. The ferro alloy imports in 2003-04 was around Rs 263 crore when the duty was reduced to 20 per cent from 25 per cent and by 2006-07 it has gone up to Rs 700 crore.

The industry body has also requested the removal of excise duty on manganese slag. “We have said that since the ferro chrome industry is facing severe problem in getting chrome ore from domestic producers due exports, the Government must stop the export of chrome ore immediately,” Mr Saraf said.

He, however, added that the industry has said if prior contractual commitments have to be honoured then the Government must increase the duty from the present Rs 2,000 per tonne to Rs 5,000 per tonne.

Further, the IFAPA has also said that the Government should direct the Indian Bureau of Mines to undertake the exploration of chrome ore reserves beyond 100 meters depth.

Metcoke duty

The industry body has also demanded zero import duty on metcoke with low ash (12 per cent) and phosphorus (0.01 per cent) content from the current level of 5 per cent.

“Metcoke is not produced in the country and we are fully dependent on imports. Currently, the industry imports around 20,000 tonnes of metcoke per month at around $425. But if the duty is waived then we will get a relief of around $21 per tonne,” Mr Saraf said.

He added that looking at the limited availability of manganese ore from Manganese Ore (India) Ltd (MOIL), the industry has recommended that exports of the ore should be stopped so that it can cater to the domestic steel industry.

The industry body has also requested the Government to give a level playing field with respect to power tariff. They have also said that power must be available to them on a long term arrangement.

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