New Delhi: India runs the risk of losing 100 billion dollar investment in steel if the government persists with restrictions like export duty, JSW Steel Vice Chairman and Managing Director Sajjan Jindal said after taking over as Assocham President.
"We are talking about 100 billion dollars over the next five to six years to be invested in the steel industry. Now if the Government of India levies duties on exports, all these investments will not come," Jindal said.
He said imposition of up to 15 per cent export duty on steel may bring apprehensions in the mind of global investors who have announced their mega plans for India.
"One has to talk to Posco and ArcelorMittal and (ask) if there is an export duty and restrictions, will they still be investing," he said.
As of now, both domestic and foreign steel players have signed 193 memoranda of understanding with states for setting up new units with a total planned capacity of around 243 million tons and a total proposed investment of over Rs 5.14 lakh crore.
While the Assocham would try and convince the investors about the temporary nature of the measures arising out of 45-month high inflation, "investors fear that even if the government withdraws the duty today, what is the guarantee that tomorrow it will not put it at 50 per cent."
The government has not only withdrawn tax refunds on steel export, but also slapped export duty up to 15 per cent. However, it is learnt that the Committee of Secretaries has agreed to roll back the export duty on many of the steel products.
Steel prices have been spiralling for the last few months. Between January and April 2008, price of pig iron went up by more than 70 per cent, construction steel like TMT and wire rods by more than 36 per cent and HR coils by more than 40 per cent.
Jindal said rise in raw material prices, strong demand in international and domestic markets are some of reasons for the sharp increase in rates.
If the fears expressed by Assocham come true, the ambitious targets of 290 million tonne capacity by 2020 will be difficult to achieve.
At present, India has a total capacity of about 53 million tons and there is a demand-supply mismatch adding to the inflation.
"We are talking about 100 billion dollars over the next five to six years to be invested in the steel industry. Now if the Government of India levies duties on exports, all these investments will not come," Jindal said.
He said imposition of up to 15 per cent export duty on steel may bring apprehensions in the mind of global investors who have announced their mega plans for India.
"One has to talk to Posco and ArcelorMittal and (ask) if there is an export duty and restrictions, will they still be investing," he said.
As of now, both domestic and foreign steel players have signed 193 memoranda of understanding with states for setting up new units with a total planned capacity of around 243 million tons and a total proposed investment of over Rs 5.14 lakh crore.
While the Assocham would try and convince the investors about the temporary nature of the measures arising out of 45-month high inflation, "investors fear that even if the government withdraws the duty today, what is the guarantee that tomorrow it will not put it at 50 per cent."
The government has not only withdrawn tax refunds on steel export, but also slapped export duty up to 15 per cent. However, it is learnt that the Committee of Secretaries has agreed to roll back the export duty on many of the steel products.
Steel prices have been spiralling for the last few months. Between January and April 2008, price of pig iron went up by more than 70 per cent, construction steel like TMT and wire rods by more than 36 per cent and HR coils by more than 40 per cent.
Jindal said rise in raw material prices, strong demand in international and domestic markets are some of reasons for the sharp increase in rates.
If the fears expressed by Assocham come true, the ambitious targets of 290 million tonne capacity by 2020 will be difficult to achieve.
At present, India has a total capacity of about 53 million tons and there is a demand-supply mismatch adding to the inflation.
No comments:
Post a Comment