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FICCI seeks zero customs duty on ferronickel; higher import levy on stainless steel flat products in Budget

Ahead of the Union Budget, business physique FICCI has requested the federal government to scale back the essential customs duty (BCD) on ferronickel to zero and levy a higher duty of 12.5 per cent on the import of stainless steel flat products. Finance Minister Nirmala Sitharaman is scheduled to current the Union Budget for FY2022-23 on February 1, 2022.

In its price range suggestions, the Federation of Indian Chambers of Commerce and Industry (FFICI) has additionally urged the federal government to proceed with zero duty on stainless steel scrap after March 31, 2022.

At current, whereas the BCD on ferronickel is 2.5 per cent, the identical on stainless steel flat products is 7.5 per cent. On stainless steel scrap, zero customs duty is relevant as much as March 31, 2022.

Putting its case for zero duty on ferronickel, Ficci stated it’s crucial uncooked materials used in stainless steel making. The stainless steel business meets the majority of its nickel necessities by means of ferronickel and stainless-steel scrap routes, as pure nickel could be very costly.

Due to the non-availability of ferronickel in the nation, home stainless steel producers are compelled to import it from international locations like Japan, South Korea and Greece. This is as a result of India is poor in nickel ore, and subsequently, there isn’t any manufacturing of ferronickel throughout the nation.

Besides, no customs duty shouldn’t be relevant on ferronickel originating from Indonesia and Japan as a result of India-ASEAN FTA and India-Japan CEPA.

On imposing a higher duty on stainless steel flat products, the physique stated, “There is a need for rationalizing these duties due to the various reasons”.

According to Ficci, imports of stainless steel flat products have been rising over the previous couple of months. From a month-to-month common of 34,105 tonnes in 2020-21, imports grew by an awesome 127 per cent to 77,337 tonnes in July 2021. These excessive imports are hurting the home business, which has the capability and functionality to fulfill your complete home demand.

There isn’t any have to rely on stainless steel imports, because the home business can produce all of the grades and thicknesses required by the end-users, it stated.

The home business has an put in capability of 5.04 million tonnes (MT), with present capability utilisation at 78 per cent, there may be sufficient scope for rising the capability utilisation to fulfill your complete home demand, Ficci famous.

It additional stated zero customs duty on stainless steel scrap has helped the business in getting uncooked materials for stainless steel manufacturing at aggressive charges, at a time when the worldwide stainless steel scrap costs have shot up by 25-40 per cent.

The business depends on scrap imports as a result of much less availability in the nation. Most of the stainless steel scrap requirement is met by means of imports due to the low price of stainless steel scrap technology domestically.

“Stainless steel scrap is crucial uncooked materials required by the stainless steel business as it’s the most cost-efficient approach of assembly the nickel necessities.

“The zero duty is required to encourage the stainless steel producers to keep using the EAF (electric arc furnace) route and reduce the carbon footprint of the sector when environmental sustainability is becoming an important issue world over,” it stated.

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