Why do Indian authorities change customs duties on raw materials prices
- 24-May-2022 4:26 PM
- Journalist: Jai Sen
New Delhi: As per sources, the global economy is in trouble due to mounting debt and soaring inflation. The Indian government has taken several steps to alleviate the high prices of coal, diesel, fuel, iron, Steel, and plastic, given the weakening of developing economies due to excessive inflation. On Saturday, the administration abolished customs duties on some steel-making raw materials, like coking coal and ferronickel, lowering costs and prices.
Imposing export tariffs on Steel goods will send a negative message to investors and have a negative impact on the Production Linked Incentive (PLI) capacity development projects. After the government eliminated customs tariffs on raw materials and raised export levies to keep local pricing in check, steel sector participants expressed their disappointment.
Also, to boost the domestic availability of Steel products, the tariff on iron ore exports was increased to nearly 50%, while the duty on a few steel intermediaries was raised to roughly 15%. According to industry experts, "The application of export charges will aid other countries in gaining a larger piece of the global market that India will be leaving behind. The supply chain would be interrupted, and India's reputation as a dependable exporter would suffer.”
The duty on iron ores and concentrates has been raised from 30% to 50%, while the duty on iron pellets has been raised to around 45%. In addition, the government has increased the export duty on hot-rolled and cold-rolled steel goods to 15% from 0%. The government has dwindled import duties on raw materials such as Pulverized Coal Injection (PCI), met coal, and coking coal. Steel export duties are projected to increase domestic supplies, putting downward pressure on pricing. Also, these lower motor gasoline prices would lower logistical costs, which would affect the sector for a long time.
As per ChemAnalyst, "The reduced prices of Steel are anticipated to result in a reduction of the cost of final products, which will further relieve the secondary players of the country. All of these initiatives collectively would assist the industry in combating rising input costs and improving liquidity. Additionally, these significant changes in import and export charges will impact the entire supply chain in the long term."