Fifty to 80 per cent of all low-ash metallurgical coal is imported into India.
In its pre-Budget
submission, Federation of Indian Mineral Industries (Fimi) has suggested that the import duty on low ash metallurgical coal mentioned above should be brought down to 2.5 per cent from existing 10 per cent to provide incentive to the domestic industry especially when its import does not hurt the domestic producers of such minerals.
Among key inputs, pet coke
is gaining currency as one of the important carbon-bearing inerts used by the steel industry. It has partially replaced costlier and scarce coking coal, adding value to the end product (metallurgical coke) by increasing the carbon content and yield of coke, leading to lessen dependence on imports. “Pet coke (two per cent Sulphur grade) is a relatively cheaper substitute of met coke and should, therefore, be encouraged in the domestic industry to help save precious foreign exchange and make domestic steel mills more competitive by lowering their cost of production”, Fimi noted.
Backing the case for zero duty on coking coal, Fimi reasoned that in the Budget
for 2014-15, the exemption available for coking coal
was removed by Government of India, bringing it at par with other coal grades.
“This amendment has adversely affected the steel manufacturers in India and ‘Make in India’ drive. Coking coal
is one of the principal raw materials being used in the manufacture of steel and predominantly used for making coke for use in steel making and thus forms a major part of the final price of the steel. Levy of 2.5 per cent of basic customs duty on coking coal and simultaneously fixing the import duty of five per cent on coke has adversely affected the costing of steel”, Fimi reasoned.