| Steel minister B. K. Tripathy (centre) in Calcutta on Friday. Picture by Kishor Roy Chowdhury
Calcutta, Nov. 14: The government might lower the import duty on steel to protect the interest of users because of surging prices in the domestic market, steel minister B. K. Tripathy today said.
“Producers have been asked to keep steel prices on a par with those prevailing in the international market. If prices here exceed global prices, then we may consider a pre-budget cut,” he said.
The minister added that a cut in import duty on steel would not be necessary if producers maintained parity with international prices.
The government, he said, could not determine prices in the open market, but if the interests of steel users were affected it might go for a cut in import duty.
Secondary producers have been complaining about the steady rise in domestic steel prices, particularly of the semi-finished variety and various other products, produced by steel majors like the Steel Authority of India Ltd (SAIL) and Tata Steel.
“We don’t have any role to play as far as steel prices are concerned. But we also have to think of other producers as well to maintain the balance in the industry,” he said.
Tripathy also ruled out any reduction in excise duties at least in the short term.
“The industry is now doing well so there is no need to reduce the excise duty on steel. But some measures are being planned to rationalise the tax structure for the benefit of the industry,” he said.
Tripathy was here to inaugurate a three-day meet organised by the Indian Institute of Metals occasion of 41st National Metallurgists’ Day.
The minister that the growth in the industry in percentage terms in the first two quarters of 2003-04 was a strong 7.4 compared with the corresponding period last year.
“I am sure we will end this year with a production of over 35 million tonnes of finished steel,” he said.
The minister also asked industry captains to focus on cost cutting measures and efficiency.
Replying to a question, Tripathy said the government has prohibited any further export of chrome ore in view of the crisis looming large on domestic players.
The government is also planning to prohibit the export of high grade iron ore as the domestic demand is getting increased. The prohibition on the ore export may however affect Tata Steel’s income potential from the exports of chrome and iron ore at least in the current fiscal.
Turning to the allocation of captive iron ore mines to state-owned Vizag Steel Plant, the minister said the government was looking for some iron ore reserves in Chhatisgarh and Orissa but no final decision has yet been taken.