15% export duty to drop steel export by 35-40%: Crisil

New Delhi, June 20 (KNN) The 15 per cent export duty imposed on several finished steel products last month will impact the steel exports of India which is expected to fall by 35-40 per cent to 10-12 million tonne in FY23.

This was shown on Monday by a Crisil Research analysis.

During the last financial year, steel exports had reached a record high of 18.3 million tone last fiscal which continue to see momentum because of the disruption caused by the ongoing Russia-Ukraine conflict.

Additionally, the European Union's (EU) move to raise India's export quota benefited domestic steel makers, and limited the impact of a 25 per cent tariff on steel imports imposed by the EU.

While steel firms enjoyed fat realisations overseas, domestic demand grew 11 per cent on-year, driving domestic prices to all-time highs. 

This led to soaring construction costs and multiple price hikes by makers of automobiles, consumer appliances and durables to pass on the increase, thereby tamping domestic demand, Crisil said.

The hike in export duty was aimed at curbing this inflation.

Commenting on the duty-driven price correction, Hetal Gandhi, director, Crisil Research said that it will improve availability of steel in the domestic market as finished steel exports dwindle.

"This will directly impact India's export volume in the current fiscal. Steelmakers will attempt to skirt the duties by bumping up exports of

alloyed steel and billets, but that is unlikely to compensate for the loss of finished steel exports," he said.

The government also hiked the export duty on iron ore to 50 per cent and that on pellets to 45 per cent, alongside slashing the import duty on coking coal, pulverised coal injection (PCI) coal and coke to 0 per cent

from 2.5 per cent.  (KNN Bureau)