According to Reuters, Indian steel companies may have to cancel their European orders after the decision to impose export duties on steel products, according to VR Sharma, managing director of Jindal Steel and Power.
As steelmakers try to balance sluggish local demand by gaining market share in Europe, whose supplies have been hurt by the Russia-Ukraine conflict, India imposed a 15% export duty on eight steel products late Saturday (21 May).
"They should have given us at least 2-3 months, we were not aware of such an important policy," Sharma told Reuters.
Sharma said Indian steelmakers have around 2 million tons of pending export orders, mostly to Europe, stuck at ports or at various stages of production.
“Perhaps this will lead to force majeure. And the client has done nothing wrong here and does not deserve to be treated like this."
He said the decision could add $300 million to the industry's costs.
“We have only 260,000 tons of orders accepted at zero export duty,” Sharma said.
JSPL, India's fifth largest crude steel producer competing with Tata Steel, JSW Steel, SAIL and ArcelorMittal Nippon Steel India, aims to increase its exports to 40% of its sales, primarily to Europe.
Export duties on steel are part of a series of changes to key commodity taxes to curb retail inflation, which has reached an eight-year high.
Sharma said the removal of import duties on coking coal, PCI coal and anthracite, and the imposition of export duties on iron ore, all important raw materials used in steelmaking, may not be enough to cushion the blow to exports.
"Coking coal prices are still very high," he said, adding that the export tax would benefit local automakers and other heavy engineering industries.
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