Indicate that the import of steel to India

Reports indicate that the import of steel to India has been increased by 70% in the period of April 2007 to march 2008. One of the key reasons for this mammoth increase in the import rate is that there is a fast growing demand for steel in India. The fast growing demand of steel is not the only reason of increased steel import in India. The other important factor being the lowered import duties and the relaxed rules and regulations of scrap metal import (Not the safety measures). Import duties of steel have been lowered from 15% to 5% during the period of 2007.

However there was a sudden increase in the import of steel in India in the year 2008. The reason being, the 5% import duty on iron, steel melting scrap, and aluminium scrap was totally scrapped in the government’s budget of 2008-2009 (i.e. Import duty is now 0% ). Moreover the general excise was reduced to 14% from 16%. We hope that this sudden cut down of import duties and general excise was to increase the availability of steel in the domestic market. Anyway this is absolutely good news to metal traders in India which keeps them smiling wide. The Indian steel imports has raisin in such a way that it exceeds the exports.

I don’t want anyone to get overwhelmed by the numbers above. To make it simple, let me tell you something about the impacts of this change in the import duty, general excise and the relaxed rules.

- The reduction of import duty of steel will allow Indian steel producers to access raw materials at lower prices.

- This act also boosts the consumer demand for the finished products in India.

- Also this reduction in import duty of scrap steel will enable India to produce steel at much lower cost than China.

- If automobile manufacturers pass this reduced excise duty in the form of lower prices, the demand of steel will increase and hence helping the companies like TATA to supply steel.

- Reduction in customs duty for on aluminium metal scrap will benefit the secondary aluminium manufacturers.

- The reduction in excise duty will enhance the housing and infrastructure activity.

- The excise duty reduction will bring down the prices of automobiles and also eventually increase their demand.

- The rule and regulations of scrap metal import are very much relaxed as they seemed impractical in India (virtually to promote the trade).

- The imports of scrap steel and aluminium will become easier and convenient than any other countries.

Hence this total cut of import duty of scrap metal in India will take India’s metal trade to the peak in the global scrap metal market. And also the new rules and regulations of scrap metal import, laid by the Indian government where withdrawn because of the impracticality of those rules. The old rules said that unshredded scraps were only permitted from suppliers who have been registered by the government. However this rule has been totally scrapped off. Don’t get confused with the facts and figures mentioned above. The thing is that “the gateway of India is wide open for metal trade, all are welcome to do the metal trade in India! So come let’s do the trade!”