The government has proposed to reduce customs duty to 7.5 percent on imports of semi-, flat and long products of non-alloy, alloy and stainless steel, Finance Minister Nirmala Sitharaman said in her Budget 2021 speech on February 1.
The government exempted duty on steel scrap till March 2022. FM Sitharaman also reduced duty, halving it to 2.5 percent, on copper scrap. This will help smaller businesses and those who recycle.
"MSMEs and other user industries have been severely hit by a recent sharp rise in iron and steel prices. Therefore, we are reducing Customs duty uniformly to 7.5 percent on semis, flat, and long products of non-alloy, alloy, and stainless steels," Sitharaman said.
"To provide relief to metal re-cyclers, mostly MSMEs, I am exempting duty on steel scrap for a period up to 31st March, 2022. Further, I am also revoking ADD and CVD on certain steel products. Also, to provide relief to copper recyclers, I am reducing duty on copper scrap from 5 percent to 2.5 percent," she added.
Industry experts say that the steel industry will benefit from the infrastructure push that the Budget gives.
"Investments in core sectors like railways, roadways, and petroleum and natural gas, which have the potential for spurring demand for metals, has seen a healthy increase across the board," said Jayanta Roy, Senior Vice-President & Group Head, Corporate Sector Ratings, ICRA Ltd.
"However, 2.5 percent to 5 percent reduction in customs duty on certain finished steel products and semis would affect domestic prices of such products, and thereby adversely impact the margins of affected players."(This is a developing story. Please check back for updates.)