Posted on 06 Sep 2022
The Federation of Indian Chambers of Commerce and Industry (FICCI) has written to the finance ministry to seek the withdrawal of 15% duties on the export of pig iron, according to local media reports.
According to FICCI, the decision to impose the export duty in May will have no positive impact on the Indian steel industry. It will however adversely affect pig iron producers, making it unviable for them to export surplus pig iron.
Merchant pig iron producers are forced to export surplus material due to subdued domestic demand and to sustain operations, it adds.
Kallanish could not reach FICCI for confirmation before Monday's deadline.
"The cost of coal constitutes nearly 50% of pig iron production cost,” FICCI is quoted as saying in the letter. “Therefore, domestic pig iron manufacturers are already struggling due to the rise in the price of coking coal. Despite an increase in the cost of raw materials, the industry is not able to increase prices due to weak domestic demand. At present, the domestic industry is working with thin and sometimes negative margins.”
The federation further said the imposition of export duty will force domestic pig iron industry to cut production because of weak domestic demand and higher cost of exports. The duty will also create a situation where small- and medium-sized industries (MSME) and other standalone pig iron producers will not be able to access overseas markets.
The export duty will also result in India losing its hold in several established markets like the US, Japan, the Middle East, and Southeast Asia, FICCI concluded.
FICCI has asked the ministry to closely review these factors and withdraw the export duty on pig iron at the earliest.
Source:Kallanish
