Impact of union budget 2017 on stainless steel market

The situation of stainless steel industry has been disregarded in the Budget. This year, Union Budget 2017 has taken 5 noteworthy decisions to effect stainless steel market.

1. Custom Duty Waiver on Nickel

A key steel making raw material in a major ease to the stainless steel industry. The basic custom duty on nickel has come down to nil from 2.5 per cent earlier, as indicated in the Budget document. Nickel alloy imports to India are expected to come down to 1,300 mt in FY17 against 3,295 mt in Fy16.

2. Custom Duty on finished goods has been not climbed

Regardless of an expansion in import of stainless steel material, the basic custom Duty on finished goods has been not climbed
Due to immoderate surge in imports of stainless steel products, the industry has been battling and was expecting an increase in basic customs duty on finished goods from 7.5 per cent to 12.5 per cent.

3. Import Duty on Long Steel Products Remains unchanged

Industry members were hopeful that Indian government may hike import duty on bars and rods which was at 10% in order to protect the domestic steel industry from less expensive steel imports. However, no changes were made in the recent budget. It is to be noticed that Indian government forced a provisional anti dumping duty in order to safeguard the interests of domestic steel industry. India imported 0.34 mnt long steel in FY16, which is expected to increase to 0.52 mnt in FY17.

4. Import Duty on Ferrous Scrap Remains Unchanged

Basic customs duty on melting scrap stays unaffected by the budget at 2.5% and on re-rollable scrap at 10%. Indian ferrous scrap import was registered at 6.12 mnt in FY16, which is relied upon to come down to 5 mnt in this fiscal.

5. Customs Duty Reduced on LNG

The decision to chop down customs duty to 2.5% from 5% on LNG (liquefied natural gas) will help domestic steel organizations that depend on imports to run gas-based steel plants.