Economy

Budget 2020: Steel, mines ministries bat for duty relief to spur domestic production

Updated : January 20, 2020 08:48 PM IST

The steel ministry has sought zero duty on raw materials which are imported such as coking coke, met coke and zinc.

The mines ministry has sought an increase in duty for products like billets, wires and bars from 5 percent to 7.5 percent.

The steel ministry has sought zero duty on raw materials which are imported such as coking coke, met coke and zinc for the production of steel in India. Most of these products attract 2.5 percent customs duty except zinc which is imported at 5 percent duty. The mines ministry has also sought an increase in customs duty for secondary aluminium and copper import and grading of bauxite ore, along with a reduction in rail freight for raw material used for aluminium production.

CNBC-TV18 has learnt that the mines ministry has sent a proposal to the revenue department for an increase in customs duty to 10 percent from the current 7.5 percent for aluminium foil, bars, rods, wire and plates. Another set of secondary aluminium products such as tubes, pipes, structures and cables which attract 10 percent duty has been suggested to be increased to 12 percent. The ministry also sought reduction of customs duty between 2-2.5 percent on raw materials like aluminium fluoride, caustic soda, carbon anodes and calcined petroleum coke which is used for aluminium production. The ministry has also highlighted that the aluminium sector is facing issue of import surge, volatility of price and increased cost of production in a market which has seen a decline.

Coming to copper, sources indicate that the mines ministry has sought an increase in duty for products like billets, wires and bars from 5 percent to 7.5 percent as tariff concessions under various Foreign Trade Agreements (FTAs) have resulted in a disparity between domestic and foreign suppliers. India imports 95 percent of its copper concentrate requirements which is subsequently used for making products. But the mines ministry has not sought any duty relief.

The ministry has also sought categorisation of bauxite on the basis of grades and duty concession on low-grade bauxite as its production has reduced in the western part of India and demand has been low internationally. It has also sought a reduction in rail freight for bauxite and alumina as it increases the cost of aluminium production in India.

India has about 4MTPA (million tonne per annum) aluminium production capacity and it imports about 60 percent.

Budget 2020: Steel, mines ministries bat for duty relief to spur domestic production

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