After Budget declaration on 1st Jun’17 Bangladesh new tax structure has adversely affected the sponge exports from India as the government of Bangladesh has removed SAFTA benefits on imports of sponge iron, pig iron & Ingot.
The fresh export offers for sponge iron lumps with Sulphur+Phosphorus 0.10-0.12% & carbon max at 0.11-0.12% are reported at USD 275-280/MT CPT Benapole port, Bangladesh.
Earlier, under the SAFTA agreement there was no duty on Imports of semis products (except Billet) from SAARC countries Including India. Which have now been removed and a regulatory duty is implemented of 5% on sponge & pig iron and 20% on Ingot & billets. This means who has to import material have to pay these new high duties.
Hence, landed cost for sponge including pig iron & ingot in Bangladesh has surged which has resulted in low purchase for Indian made semis products.
India is the world’s largest sponge iron producer & exporter. In FY17 the country exported 260,000 MT DRI to Bangladesh from the total exports of 340,200 MT.
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