With removal of custom duty on certain raw materials, Union Budget 2024-25 has given Indian steel manufacturers a competitive edge.
All eyes were glued to the Union Budget 2024-25 as the country looked at the newly formed government to provide better opportunities.
Honourable Finance Minister Nirmala Sitharaman has announced the elimination of the 2.5 per cent customs duty on ferro-nickel, making it duty-free, along with extending the duty exemption on ferrous scrap until March 2026, in Union Budget 2024-25. This strategic move aims to support the domestic steel industry by reducing the cost of production and improving the global competitiveness of Indian steel manufacturers.
Since essential materials such as ferro-nickel and molybdenum are critical resources and having access to them at more competitive prices will elevate steel production in India, key industry players have long advocated for the removal of duties. The duty exemption announced in the Union Budget 2024-25 is expected to lessen the financial burden on steel producers and potentially allow cost savings to be passed on to customers.
While the steel industry has expressed approval of the government’s decision to provide financial support for the production of high-grade steel in India, stainless steel manufacturers, too, are expecting a similar support to enhance the nation’s high-grade stainless-steel offerings.
In the realm of housing and infrastructure, the government’s is planning to build an additional two crore affordable houses over the next five years, along with the continuation of its infrastructure-led economic growth policy, as mentioned in the Union Budget 2024-25. This development will indirectly benefit the steel industry. The projected 17.7 per cent growth in budgetary government capital expenditure and substantial allocation for housing under the Pradhan Mantri Awas Yojna (PMAY) will continue to boost domestic demand for steel and cement in fiscal 2025.
The steel prices have remained subdued recently due to sluggish global demand and overcapacity in China, the world’s largest steel producer. However, the provisions made in the Union Budget 2024-25 are likely to boost the demand considerably.
