India has annulled a host of ferrous export duties, including for flat products, which it implemented in May to the shock of steel suppliers.

Effective 19 November, exports of pig iron and steel products under HS code headings 7208, 7209, 7210, 7213, 7214, 7219, 7222 and 7227 will incur zero duty, as will exports of iron ore lumps and fines below 58% Fe content, and iron ore pellet. Exports of iron ore lumps and fines above 58% Fe will see duty reduced to 30%.

The government has also withdrawn concessions on raw material imports. Anthracite/PCI and coking coal, as well as ferronickel will attract an import duty of 2.5%, while coke and semi coke imports will see a 5% duty levied.

“The current measures will provide a fillip to the domestic steel industry and boost exports,” the Indian finance ministry says in a note seen by Kallanish.

The duty amendments were initially made following rising steel prices, in order to ensure availability of both finished steel as well as raw materials or intermediates required for steelmaking. They severely hit Indian hot rolled coil exports, which plummeted 97% on-year to only 18,959 tonnes in September, according to the Indian commerce ministry’s latest data. January-September exports were down 40% on-year to 3.07 million tonnes.

Buyers in India’s lucrative European export market have been reluctant to accept boron-added HRC from Indian suppliers as a way of circumventing the 15% export duty. Buyers in export markets have shifted their preference to non-alloy HRC suppliers like China, Taiwan, Japan and South Korea.

Indian steelmakers complained the export duty hampered production ramp-ups following recent investments into new steelmaking capacity, as well as disincentivised future investments. Many carried out extended maintenance stoppages over the summer. They are unsurprisingly pleased with the latest announcement.

“This will re-energise and further motivate the industry to move forward with full confidence to put the steel sector towards an inclusive growth path,” Indian Steel Association (ISA) president and ArcelorMittal Nippon Steel India chief executive Dilip Oommen says of the export duty removal.

“The decision to withdraw the export duty imposed on iron and steel items immediately once the inflation numbers came to a reasonable level shows the concern of the Government of India towards the common man and the industry,” observes ISA secretary general Alok Sahay.

The duties are nevertheless being removed at a time when global economic growth is slowing significantly due to inflation, monetary tightening, zero-Covid in China and the repercussions of war in Ukraine, particularly in Europe. It remains to be seen whether Indian supply finds many takers.