Experts Group Blames Govt For Poor Steel Exports

Blessed with cheap raw materials and labour, India could have made its presence felt in the international market, said the group headed by former Planning Commission member Nitish Sengupta.

India has the potential to export six million tonnes of finished steel by the turn of the century, provided there is a strong political will and determination on the part of policy makers and plant-level managers, the report says.

The group has suggested that the government make efforts to facilitate the export of steel to Pakistan, a Saarc country, which is a net importer of finished steel. Indian steel producers should pay attention to the rapidly growing South-East Asian and Chinese markets also, the report says.

 

The group has recommended the introduction of a policy of applying import duty at 25 per cent of the normally applicable rate on capital goods, against a commitment to export 50 per cent of total production.

To make efforts of the steel industry meaningful and permanent, it was necessary to make the industry competitive, not only for export production but also for total production.

The group has urged the government to reduce the import duty on basic raw materials like coal for metallurgical applications. The suggested rates of duties are 2.5 per cent for coking coal, 5 per cent for non-coking coal and 5 per cent for coke. The group has recommended 2.5 per cent duty on imported melting scrap, whereas the sponge iron manufacturers have demanded at least 15 per cent duty.

At the same time, the group has emphasised an improvement in infrastructural facilities including the railways, highways and port facilities which would help in cost reduction.

The major steel plants in India are internationally competitive in terms of production costs, however, a large part of the cost advantage is lost on account of poor transport and other infrastructure.

The government should consider the steel industry as part of infrastructure sector and accord all priorities, importance and benefits which had been provided to infrastructure development. Since the export of steel is going to be a major business activity in the coming days, India should make efforts to establish itself as a stable exporter in the international market, the report says.

The group has also urged the government to simplify procedures related to export of steel.