SEATTLE (Scrap Monster): The duty imposed by the Indian government on export of certain steel products is unlikely to derails capital investment plans announced by major steelmakers in the country. The top producers cited that the export duty measure is a short-term move by the administration to counter rising inflation and that it will be withdrawn shortly.
Commenting on the impacts of the export duty on domestic steel industry, Tata Steel noted that prolonged duty even after steel prices slipping to lower levels will be detrimental to the profitability of the industry. T.V. Narendran, CEO and MD, Tata Steel noted that it has no plans to defer its capex plans due to export tax. The company stands by its capex guidance for the current year and for the next few years, he added.
ArcelorMittal Nippon Steel India (AM/NS India) too expressed the hope that the export duty will be a short-term measure by the government. Also, Sajjan Jindal, Chairman and Managing Director, JSW Steel said that the company is hopeful that the government will withdraw the levies once inflation moderates.
Tata Steel had earlier announced capex of INR 12,000 crore for its India and Europe operations during the current financial year. AM/NS India too had announced plans to invest around INR 1 lakh crore over the next decade.