India’s decision to boost spending on infrastructure and road construction along with a rationalization in its duty structure will help the domestic steel and mining industry that are struggling in the current global slowdown, the steel and mines minister said.
Narendra Singh Tomar said in a statement that the latest government proposals announced in the annual budget by Finance Minister Arun Jaitley would boost the economy and generate demand for steel in the country.
The minister said the decision to increase custom duty on zinc alloy will control the recent surge in imports. “Removal of export duty on iron ore with Fe content less than 58 percent will encourage exports of iron ore, which is not being utilized in India and increase in custom duty by 2.5 percent on aluminium will provide relief to domestic industry,” he added.
The steel industry will also benefit from increase in demand as a result of other budgetary proposals such as:
- A new policy to expand LPG connections to the poor particularly in the rural areas will help increase demand for LPG grade HR Coils.
- A target of 100 percent village electrification by May 2018 will also induce a demand for steel products such as poles, structural steel, wires, electrical steel, etc.
- A policy to provide 100 percent FDI through FIPB route in food products produced and marketed in India will increase the need for storage for food products. This, in turn, will increase the demand for containers and silos for storage, indirectly boosting steel demand.
- The government’s investment plan of Rs. 85,000 crore in irrigation will also increase demand for pipes and tubes.