The Indian steel industry is being urged by the government to increase exports and gain back some the lost market share for the rest of the 2022-23 fiscal year ending 31 March following the removal of export duties.
"I would urge [the steel industry] to get back the mojo, get back the numbers and let's for the next four months make an effort to pull up our socks and get back to significant exports, so that we can capture our market share," commerce and industry minister Piyush Goyal said at a conference organised by the Indian Steel Association (ISA) this week.
The export duties imposed in May were necessary to provide price stability for domestic infrastructure projects, with Goyal saying "it had done wonders".
The export duties, which were imposed in late May to curb inflation and increase the availability in the domestic market, increased Indian steel inventories by 20pc and sharply hit the margins of steel market participants in the first half of 2022-23, said ISA president and AM/NS India chief executive Dilip Oommen, adding Chinese exports in the Middle East increased by 22pc as India exited the market after the duties were imposed.
He called on the government to include the steel sector in the Remission of Duties and Taxes on Export Products scheme, to boost exports and encourage India to play a key role in the Make in India, Make for World initiative.
The minister asked the steel industry to support micro, small and medium enterprises and exporters of value-added engineering products, so that there is no "runaway rise in domestic steel prices and small manufacturers don't get hurt post the removal of export duties".
Making use of FTA
The Indian steel industry has also been asked to make use of a free trade agreement (FTA) with Australia that make coking coal imports duty free and also look at exporting steel, as the steel sector will be exempt from the 5pc duty in Australia.
The engagement on FTAs has focused on giving protection to the domestic steel industry, Goyal said. "Many of our FTAs do not have that provision and it's a ridiculous situation where other countries are exporting steel to India using the FTA. So both in the UAE and in Australia FTAs, we have gotten the melt and pour conditions so that only steel produced locally in those countries can be imported into India."
The country's per capita consumption of steel leaves a lot to be desired that is below world average, Goyal said, although there are huge opportunities in the Indian domestic market with the growing automobile and manufacturing industries.
He acknowledged the challenges with coking coal purchases and urged the industry to do significant research in the area and look for alternatives, so that the country will be self-sufficient and not dependent on two or three countries where prices for the key input is very high.
Goyal also encouraged the industry to work on green steel. "Whoever comes up with green steel faster, will probably have an edge in the international markets. I do believe India will have to engage with sustainability in a big way, so that Indian steel can get a priority over other countries, and we can really look to capture bigger and bigger markets and get value for the green steel and sustainably produced steel."
