Moneycontrol
Feb 29, 2016 11:50 AM IST | Source: Moneycontrol.com

Budget 2016: Export, import reforms essential to protect metal industry

Domestic companies have been demanding for a minimum import price (MIP) for metals as a safeguard against cheap products from China.

The metal industry continues to be hobbled by a double whammy of weak commodity prices and cheap imports. Metals are expected to be on the government’s priority list, more so because of the huge loans they owe banks.

Domestic companies have been demanding for a minimum import price (MIP) for metals as a safeguard against cheap products from China. The aluminum industry has been seeking a doubling of import duty to 10 percent from the 5 percent currently. Aluminum comprises of 58 percent of total metal imports.

Earlier this month, the government had imposed MIP on 173 steel products ranging between USD 341 to USD 752 per tonne. This, however, is applicable for a review after six months.

The steel industry is hoping for a 25 percent MIP from the current 15 percent along with removal of export duty of 2.5 percent on coking coal, which is an essential raw material for the industry.

The metal industry is also batting for removal of 10 percent export duty on iron ore fines and lumps from the upcoming Budget. One could also see some export duty on alumina, so as to discourage export and boost domestic supply.

Also, any further rise in the clean energy cess, which was increased from Rs 100 per tonne to Rs 200 per tonne could lead to additional expense for major players in the industry.
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