October 11, 2008

Indian forging industry seeks 25% duty on iron ore exports

BS reported that the Association of Indian Forging Industry has urged the government to either stop iron ore exports from the country or levy 25% duty on them and to set up a regulator to control steel prices.

Mr Vidhyashankar president of AIFI said that steel prices in India have shot up 33% in the last eight weeks.

Mr Vidhyashankar added that ex factory steel prices in the international markets were 20% to 30% cheaper for local delivery than Indian local prices.

According to AIFI, the increasing exports of steel have been fuelling price increases in the domestic market and are keeping India in the lower rung of the value chain. He noted that China had taken measures to encourage export of finished goods and levied 25% export duty on carbon steel.

Forging industry is at present mostly dependent on Indian steel for domestic sales and finished product exports as steel is the key input in forgings accounting for 60% to 70% of the input cost. Pig iron and steel scrap are key inputs in steel castings.