After an intense battle with the government on rising prices, steel makers today called truce by agreeing to stop exports, forego DEPB benefits and supported reducing import duty on the alloy. “Steel producers today met the top brass of the Steel Ministry and conveyed that they also shared the government’s concern on rising prices and its impact on the common man,” Indian Steel Alliance President Moosa Raza said. “Accordingly, we have assured them that we will exercise self-restraint on export of steel products with immediate effect to enhance domestic availability of steel,” Raza said. The ISA president pointed out that the Alliance has demanded bringing down the excise duty on steel to 8 per cent besides seeking reduction in import duty on input materials like met coke, refractories, ferro-alloys, zinc, etc.

“In order to increase supply in the domestic market and as a temporary measure to disincentivise exports, the industry extended support to the government in reducing import duties on steel along with abolition of DEPB benefits on exports,” Raza said. The ISA also sought fiscal and physical measures to contain exports of iron ore and asked government to take necessary steps to facilitate the establishment of additional capacity and augment steel supplies in the market, he said. “Steel prices have been rising mainly due to unhindered rise in input costs. The input costs are expected to increase further from April 1,” he said.

The steel producers and the government were at loggerheads on the issue of rising prices since the past one month. Steel minister Ram Vilas Paswan had asked Prime Minister Manmohan Singh to consider setting up a regulator in the steel sector, impose 10 per cent export duty on steel and abolish import duty on the alloy. Paswan had also suggested that steel be re-classified as an essential commodity and withdrawal of DEPB benefits on steel exports to ensure its availability in the domestic market as the demand-supply mismatch was on the rise. Raza wrote a letter to the Prime Minister saying that setting up a regulator would “be putting steel producers between the two prongs of a pincer”.