The Federation of Indian Chambers of Commerce and Industry (Ficci) is lobbying the country's government to remove basic import duties on coking coal and met coke to protect domestic steelmakers.
Ficci wants Delhi to scrap a 2.5pc import duty on coking coal and a 5pc import duty on met coke in the next federal budget on 5 July, which it said would help the industry to be cost competitive.
India's Bharatiya Janata Party (BJP) government was re-elected to a second term in office in general elections that concluded last month. The new government's budget is widely expected to include measures to refinance banks amid a liquidity crunch, as well as public spending on infrastructure projects, which should be positive for the ferrous sector.
The Indian Steel Association, which represents the country's six large integrated mills, has pushed for a 25pc safeguard duty on steel imports along the lines of the Section 232 tariff imposed by the US last year.
Steel supplies from other Asian countries are being diverted to India after higher duties were implemented by the US and EU, according to steelmakers.
Indian producers of automobiles, consumer durables, heavy engineering goods and infrastructure companies are opposed to any additional protection for steel imports as this would increase their cost of production, especially as domestic demand and exports of manufactured goods remain slow. The real estate and infrastructure construction industries have also been hit by the liquidity crisis.
"We are at the mercy of Indian mills charging high premiums over global steel prices," said the manager of a Pune-based auto-components supplier.
The Argus-assessed Indian domestic price for hot-rolled coil 3mm and above was at 40,500 rupees/t ($582/t), while import offers for similar grades are currently at $535/t cfr Mumbai.
Ficci has also sought higher export duties on graphite electrodes, which are used in electric arc furnace-based steel production. India exports 60pc of its domestic output, leading to higher prices for steel mills. The association wants the current 7.5pc import duty on graphite electrodes to be scrapped.
The Federation of Indian Mineral Industries (Fimi) last week appealed to finance minister Nirmala Sitharaman to remove a 30pc export duty on iron ore above 58pc Fe grade. About 151mn t of iron ore below 62pc Fe grade has piled up at pitheads because of domestic demand, it said. But the Pellet Manufacturers Association of India (PMAI) has asked the government to increase export duties on iron ore above 58pc Fe content to 50pc.
Domestic iron ore is the raw material for India's production of iron ore pellet, which is currently experiencing a boom in exports because of a global pellet supply crunch. India does not impose export duties on pellet and ores below 58pc Fe.
Steel consumers such as automobiles, consumer durables, housing and infrastructure construction companies are also seeking a tax cut on consumer goods and lower personal and corporate taxes to spur growth. The Society of Indian Automobile Manufacturers wants the government to cut the general sales tax (GST) on all vehicles to 18pc from the current level 28pc.
