Financial Daily from THE HINDU group of publications
Saturday, Jun 19, 2004
Industry & Economy
`Steel exports dip despite bullish global trends'
Kolkata , June 18
DESPITE the global bullish trend, steel exports from India during the last two months have dropped significantly.
According to Mr Moosa Raza, President of Indian Steel Alliance (ISA), this fall is due to the withdrawal of the duty entitlement passbook (DEPB) of 15 per cent of steel items from March 27, this year.
When asked to quantify on the fall in the exports, either in terms of value or volume, Mr Raza said it is too early to do it. "Instead I should say that we came to know about this fall from our members," he told reporters after a meeting in the city.
ISA had already written a letter to Mr Kamal Nath, Union Commerce Minister, informing him about this development. It had also sought the resumption of the 15 per cent DEPB on steel exports to make "domestic steel sector globally competitive".
ISA was, however, non-committal on the issue of the proposed steel regulatory commission as suggested by the new Union Steel Minister, Mr Ram Vilas Paswan.
Despite several queries from the media, Mr Moosa and Dr J.J. Irani, Chairman of ISA, said that they would not comment on this matter without studying the Union Government's proposal.
However, Dr Irani asked everybody to study the growth of Indian steel industry during the regulated regime (from sixties to early nineties) and in the current deregulated period, which started off in 1992.
He further clarified that the domestic steel was not consulted by the Union Steel Minister on this matter before making the announcement.
About the rising steel prices, Dr Irani said that it is likely to be in the range for the next one year. Thereafter, it might start falling.
Like in earlier roadshows of ISA, Mr Moosa reiterated that per capita steel consumption in India should increase from the present level of 30 kg to 60 kg by 2012. This would need another 20 million tonnes of fresh capacities apart from the existing 36 million tonnes.
"The minimum investment needed for this sort of a brownfield expansion would be around Rs 75,000 crore as one million tonne cost approximately Rs 3,000 crore. The Government would have to play a crucial role in this development," he said.
The ISA also suggested that the Union Government should work out some attractive scheme so that fresh investments can easily come into this sector as it had already done for the power sector.
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