New Delhi – VR Sharma, managing director of Jindal Steel and Power, told Reuters that Indian steel companies could cancel European orders and face losses after the decision to impose an overnight export tax on steel products.
India imposed a 15% export tax on eight steel products late on Saturday, as steelmakers sought to meet local demand by increasing their market share in Europe, whose supplies were damaged by Russia’s invasion of Ukraine.
“They should have given us at least 2-3 months, we didn’t know about such an important policy,” Sharma told Reuters in an interview.
Sharma said Indian steelmakers have about 2 million tonnes of pending export orders, mostly in Europe, which are stuck at ports or at various stages of production.
“It simply came to our notice then. And the customer has done nothing wrong here and he is not worthy of being treated that way, ”he said.
Russia and Ukraine exported 46.7 million tons in 2020, mostly to the European Union, the world’s second-largest steel importer, according to the World Steel Association.
The decision could increase the industry’s cost by $ 300 million, he said.
“We alone have orders for 260,000 tonnes, which were taken when the export duty was zero,” Sharma said.
JSPL, India’s fifth largest crude steel producer competing with Tata Steel, JSW Steel, SAIL and ArcelorMittal Nippon Steel India, aimed to sell up to 40% of its exports, mostly to Europe.
The export tax on steel is part of a series of changes in taxes on key commodities aimed at controlling retail inflation, which has reached an eight-year high.
Removing import duties on coking coal, PCI coal and anthracite and imposing export tax on iron ore, all basic raw materials used in steel making, may not be enough to reduce export losses, Sharma said.
“The price of coking coal is still very high,” he said, adding that the export tax would benefit local carmakers and other heavy engineering industries. (Reporting by Sudarshan Vardhan and Aftab Ahmed; Editing by Jason Neely)