In order
to stimulate the ailing steel industry and incorporate investments made in the
sector, Assocham today sought exemption of iron ore from import duties as in
the case of other minerals like coal.
“Import
of finished steel products in India from South Korea, Japan and other countries
from ASEAN land at high concessional duty rates as compared to normal duty
rates from other countries thereby making these steel products cheaper and
pushing the sector in peril”, Assocham said in a communication to Finance
Secretary Arvind Mayaram.
Assocham has asked the government to revert this “inverted” duty rate
between finished steel and iron ore which it said is denying an opportunity to
the steel sector for value addition apart from risking huge funds invested by
various banks and financial institutions.
“Non-availability of iron ore arising out of a tighter regulatory regime
and various government impositions to weed out illegalities from iron ore
mining sector is further stressing the steel production in India”, said
Assocham Secretary General D S Rawat in a statement.
“Though steel sector has been growing at the stipulated rate, in recent
past the growth has received a major jerk because of the recent shortage of
iron ore and as a result major investment proposals of leading domestic and
global steel industry players have been halted because of non-assurance of
committed supply of iron ore”, said Rawat.
Despite risks like fluctuating FOB prices of iron ore with demand-supply matrix
in international pitch, some steel industry players are seriously exploring for
long term agreements for their plants survival and many have already imported
cargo as test shipments and the cost of the imported cargo is exorbitantly
high, the industry body said.
Assocham said some players are also resorting to acquisition of iron ore mining
assets abroad which is throwing them to another basket of risk called host
country regulatory risk.
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