The Ministry of Finance, Government of India on 8th May, 2013 imposed 2.5% basic custom duty on imports of Melting Scrap of Iron & Steel (other than Stainless Steel), Scrap of Stainless Steel for melting purposes and Aluminum Scrap. And additional duty of 4% on imports of Brass Scrap was also levied.
Steel 360 spoke to Zain Nathani, Vice President – General, Metal Recycling Association of India (MRAI) on impact of such imposition and future of Scrap import to India.
Q. Sudden implementation of import duty of 2.5% on Scrap. What is your immediate comment/reaction on it?
Metal Recycling Association of India (MRAI) has reviewed these notifications and is extremely shocked and disappointed with the changes in duty structure that will negatively impact the domestic Steel Industry (especially the Induction and Electric Arc furnaces) and the domestic Non-Ferrous Industry (which is composed of mainly SSI and micro units). What is most surprising is, that there was not a single meeting or prior discussion held with the stakeholders and members of the recycling industry.
Q. Any sponge lobby behind imposition of such import duty on Scrap?
We don’t know where did this whole thing come up suddenly from? Whether, there is a Sponge lobby involved or how, it is very difficult to understand. All I can say is with implementation of such duties, Sponge iron prices went up overnight since manufacturers have no option but buy Sponge (cheaper than Scrap after duties). Ultimately, this increased cost of the material will be passed on to the end users. If the Government had a clear stand and logic behind these duties, how did they allow increase in Sponge iron prices overnight?
(The full text of the interview is available in the June issue of the magazine.)