NEW DELHI: In a clear indication that primary steel exports may face a complete ban, the government on Friday withdrew export incentives under focus product scheme (FPS) available to certain steel products. The move comes close on the heels of the government withdrawing DEPB benefit on steel products in its bid to improve steel availability in the market and contain its rising prices.
Under FPS scheme the government aimed at giving a thrust to manufacture and export certain products including steel. However, the withdrawal of this benefit for the steel products would have a limited impact on the sector. It is expected that out of total steel exports of about 4-4.5 million tonnes, the withdrawal of the FPS incentive would impact only over 10% of exports.
“The measures (to make exports less attractive) in the FTP will not help in curbing inflation in the short term. Rather than supply constraints, there are other factors which add to inflation. The government should address major issues such as rising input prices for the steel sector. Only this can stabilise steel prices in the long run,” said Moosa Raza, president, Indian Steel Alliance.
Commerce secretary, G K Pillai, however, said that the measures were part of packages that are being worked out by the government to contain rising prices of steel. He said that export incentives have been withdrawn on steel products as these are not desirable for products that may be considered for an export ban. It is expected that CCP meeting next week may consider a complete ban of steel exports as part of large fiscal package aimed at softening inflation.
Under FPS scheme the government aimed at giving a thrust to manufacture and export certain products including steel. However, the withdrawal of this benefit for the steel products would have a limited impact on the sector. It is expected that out of total steel exports of about 4-4.5 million tonnes, the withdrawal of the FPS incentive would impact only over 10% of exports.
“The measures (to make exports less attractive) in the FTP will not help in curbing inflation in the short term. Rather than supply constraints, there are other factors which add to inflation. The government should address major issues such as rising input prices for the steel sector. Only this can stabilise steel prices in the long run,” said Moosa Raza, president, Indian Steel Alliance.
Commerce secretary, G K Pillai, however, said that the measures were part of packages that are being worked out by the government to contain rising prices of steel. He said that export incentives have been withdrawn on steel products as these are not desirable for products that may be considered for an export ban. It is expected that CCP meeting next week may consider a complete ban of steel exports as part of large fiscal package aimed at softening inflation.
No comments:
Post a Comment