New Delhi, April 3: Top steel makers today agreed to cut prices of long products by Rs 1500-2,000 a tonne, including TMT bars that are used in construction.
They would also cut prices of galvanised coated steel, used in roofing, by Rs 500-1,000 a tonne.
The move follows a government threat to flood the market with foreign steel by reducing its import duty to zero.
At a meeting today with steel firms — attended by, among others, the representatives of Steel Authority of India Limited, Tata Steel, Ispat and Jindal Steel — steel secretary R.S. Pandey did not mince his words about the gravity of the situation, prompting the firms to agree on a price cut.
Spooked by rising inflation, which touched a 14-month high of 6.68 per cent in mid-March, the government had in the last few days announced a series of measures to check prices.
The cabinet secretary, who heads the committee of secretaries on prices, has also asked individual ministries to devise sector-specific strategies.
The tax measures are expected to cost the exchequer between Rs 3,000 crore and Rs 4,000 crore.
The proposal to slash the import duty on steel from 5 per cent to zero came from the finance ministry, which considered this to be a way to bring steel makers to their knees.
Earlier, the government had taken away export benefits from steel makers.
To bail out small and medium enterprises, the government had asked companies to sell at least 6 lakh tonnes to them.
Though the Indian Steel Alliance, a lobbying body, say that prices are comparable with, or even lower than, abroad, user industries do not think so.
V. Krishnan, president of the Association of Indian Forging Industry, said, The ex-factory prices of steel in international markets are 20 to 30 per cent cheaper for local delivery there, than Indian local prices.