Indian steelmakers are trying to increase their exports to Europe, whose supplies have been hit by Russia’s invasion of Ukraine. This will help to cover up the tepid demand in domestic market. But a 15% recent increase in export tax on eight steel products by the central government may dampen the Indian exports target.
Indian steel firms could be forced to cancel European orders and suffer losses after an overnight decision to impose export taxes on steel products, V R Sharma, managing director at Jindal Steel and Power shared. “They should have given us at least 2-3 months of time, we did not know about such a substantial policy,” Sharma told Reuters.
Sharma said Indian steelmakers have about 2 million tonnes in pending export orders, mostly to Europe, which are stuck in ports or in various stages of production.
“This could possibly lead to force majeures. And the customer has done no wrong here and he doesn’t deserve to be treated that way,” he said.
Russia and Ukraine exported 46.7 million tonnes in 2020, mostly to the European Union, the world’s second biggest importer of steel, according to the World Steel Association.
The decision could raise industry costs by as much as $300 million, he said. “We alone have 260,000 tonnes of orders, which were taken when export duty was zero,” Sharma said.
