Setting speculations to rest, the Steel Ministry has finally recommended rolling back the export duty on flat steel products and exempting duty on some other steel products for which input materials are imported under the Advance Licensing Scheme. Flat products are used to make auto grade steel and consumer durables.

The Ministry has asked the Committee of Secretaries (CoS) to consider rolling back the export duty on flat products given the fall in its prices and also due to the self-restraint exercised by steel makers in shipping their output overseas. The Finance Ministry would take a final view after the CoS agrees to the proposal, Steel Ministry sources told The Indian Express.

Some producers engaged in producing value-added steel products have said that export duty on cold rolled, galvanised and coated sheets as well as pipes and tubes, the inputs for which are hot rolled coils imported under the Advance Licensing Scheme, should be exempted from the purview of the export duty.

The Ministry has also favoured imposition of 15 per cent ad valorem duty on iron ore exports to ensure raw material security to the domestic industry, which has announced major capacity expansion plans. The government had imposed an export duty of 15 per cent on primary or semi finished steel and HR (hot rolled) coils and 10 per cent duty on rolled products, including cold rolled coils and sheets.

In a meeting with Prime Minister Manmohan Singh earlier this month, steel makers pledged to cut prices by Rs 4,000 a tonne and hold the price line for the next three months. Industry sources, however, said that the export duty hurt their profits at a time when global raw material prices have seen a spike.

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