New Delhi: The steel industry could be in for another shock with the government now considering banning exports of flat steel products with a view to check rising inflation.
“If the prices of flat steel products are not being kept in check, either the export duty could be increased or a ban on exports could be considered to increase domestic availability,” Committee of Secretaries (CoS) observed in its last meeting.
It also noted that the government may consider increasing export duty on long steel products and subsequently explore the possibility of banning iron ore exports to increase domestic availability.
Steel prices have since January this year shot up around 50%, adding to double-digit inflation, which is hovering at a 13-year high of just below 12%.
A labourer works at a mild steel factory in Siliguri. Steel prices have shot up by around 50% since January, adding to double-digit inflation. Photo: Rupak De Chowdhuri / Reuters
Government had on 13 June exempted flat rolled products of iron and steel, including galvanized products, pipes and tubes that attracted export duty ranging from 5% to 15% ad-valorem, from the purview of the export duty.
The rate of export duty on long products such as bars and rods, angles, shapes, sections and wires was also increased from 10% to 15% and a 15% ad-valorem duty was imposed on iron ore.
The CoS decided that the Ministry of Steel in consultation with Department of Revenue would soon consider suitable measures for increasing the domestic availability of steel and moderating its prices.
The ministry would also consider proposals for implementation in early August when the three-month self- moratorium imposed by major steel producers to hold their priceline expires.
The ministry would quickly undertake an analysis on the options available for moderating the prices of iron ore and submit it for consideration of the company of secretaries during the next meeting, they added.