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The Union Finance Minister Nirmala Sitharaman is set to present the interim budget for 2024-25 on February 1. While the final budget is expected only after a new government is in place post national elections, the metals and mining industry has pinned expectations on continued spending on infrastructure and anticipates reforms to restrict Chinese dumping.
"The government should continue the focus on increasing the spend on infrastructure. It should also work on further improving the cost of doing business and the ease of doing business," said Tata Steel Managing Director TV Narendran.
"Rising imports are a concern and should be tracked closely as dumping of steel in India can hurt the profitability and hence the investment plans of steel industry,” Narendran added.
In 2024, the minerals and metals industry in India is expected to play a pivotal role in filling production gaps and reducing dependence on imports. Policy reforms and government incentives are anticipated to contribute to this shift.
However, analysts don't expect major reforms or allocations. Since it is an election year, the government will not be presenting a full-fledged budget. Instead, an interim budget makes provisions for managing expenses and revenues for a short period until a new government is elected.
But key players of the industry such as Jindal Stainless and APL Apollo Steel Tubes expect the budget to introduce some reforms.
Jindal Stainless Managing Director Abhyuday Jindal has proposed a long-term exemption of basic customs duty on ferro nickel and ferro molybdenum to ensure the industry's access to this important raw material at competitive rates.
"The issue of dumping and substandard imports from China, especially 200 series grades, is a well-established challenge. To address this issue, we propose the establishment of fixed tariff values for stainless steel and also the amendment of the trade remedial laws to delete the “lesser duty rule” and impose duty based on subsidy margin/dumping margin," Jindal added.
Separately, Apollo Steel Managing Director Sanjay Gupta, has proposed a potential reduction in GST and export policy reforms.
Steel Industries have proposed exemption of customs duty on roasted Molybdenum Concentrate, Ferro Molybdenum and Ferro Nickel Molybdenum and zero customs duty on Steel, Stainless-Steel Scrap,
coking coal and PCI coal.
"There could be some tinker about import duty but chances are low because it doesn't seem like the commodity companies are incurring any losses. One can watch out for the infrastructure spending announcement since that would be an indicator for the steel demand," said Ravi Sodah, equity analyst at Elara Capital.
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