The
proposal to scrap levies ranging from 2.5% to 7.5% in the world's second
biggest producer of crude steel comes ahead of the national budget for 2023/24
set to be unveiled in February.
Imports
of coking coal meet about 85% of India's annual requirements of about 50
million to 55 million tonnes.
India's steel ministry has asked the finance ministry for a waiver of import
tax on coking coal among a slew of raw materials, as it scrambles to fill a
shortage of steelmaking ingredients, two government sources said on Tuesday.
The proposal to scrap levies ranging from 2.5% to 7.5% in the world's second
biggest producer of crude steel comes ahead of the national
budget for 2023/24 set to be unveiled in February.
The ministry's plan to scrap the tax on limestone, manganese ore, steel scrap,
graphite electrodes, chrome ore, and ferro nickel, in addition to coking coal,
has been sent to the finance ministry, said the sources, who spoke on condition
of anonymity.
"The
idea is to import raw materials, whichever is available, at the lowest possible
import duty," said one of the sources. "We have asked for a waiver,
complete removal."
If agreed, the tax waiver on the raw materials would cost about 37 billion
rupees ($449 million), the sources said.
Spokespersons of the steel and finance ministries did not immediately reply to
an email from Reuters to seek comment.
Imports of coking coal meet about 85% of India's annual requirements of about
50 million to 55 million tonnes.
Australia is India's top supplier, and a free trade pact between New Delhi and
Canberra that takes effect from Dec. 29 allows duty-free imports of coking coal
by India.
Stung by a sharp rise in global prices of coking coal, a key raw material in steelmaking,
India has been aiming to diversify its purchases.
Indian steelmakers' profits declined this year as global demand slowed and the
government slapped an export tax on some steel products.
Last month, India scrapped export tax on some steel grades,
but industry officials say it will take time to claw back some of the business
lost in traditional export markets, such as Europe.