Duty on Export of Steel

Steel exports are subject to a 15% duty imposed by the Ministry of Finance (Department of Revenue). The move is expected to lower the cost of solar mounting structures, giving mounting structure manufacturers and solar project developers some relief.

Flat-rolled steel products with a width of 600 mm or more, other stainless steel bars and rods, and bars and rods hot rolled into irregularly wound coils of other alloy steel are all subject to a 15% export duty.

Since last year, steel prices have been steadily rising. The government has decided not to levy any duty on the import of steel-making raw materials such as pulverized coal, coking coal, and ferronickel.

JSW and Tata Steel are the market leaders in India. These companies’ steel exports contribute to the domestic market’s demand-supply gap.

Harshal Akhouri, Co-founder of Strolar Mounting Systems, in response to the government’s move, said, “There is a considerable gap between domestic demand and supply. A 15% duty on steel export is a good step. With the duty in place, Indian products will not be competitive enough in the international market.”

He also predicted that without duty on raw materials, the price of coking coal will fall by 5%. He expected that the cost of module mounting structures would drop by nearly 10%.

“Once the demand picks up, prices will stabilize, and the developers will get a clearer picture of project development. For utility-scale projects, steel module mounting structures are used, whereas, for rooftop projects, aluminum is used,” Akhouri added.

SNS Corporation, Strolar, and ISHKON Industries were the top three module mounting structure suppliers in the Indian solar market in calendar year (CY) 2021.

“I think steel producers were exporting large quantities and creating a vacuum in India. Now, things will improve. With steel prices expected to decrease, developers and independent power producers will be happy. The price reduction could be up to 10%.” a top executive from another module mounting structure manufacturer said. However, he believed that prices would drop only in July or August.

Anti-dumping duty on certain flat-rolled aluminium products imported from China were recommended by the Directorate General of Trade Remedies in September to compensate for the harm caused by dumping in the Indian market. Solar module mounting structures for rooftop solar projects are made of flat-rolled aluminium.

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Resource: Mercom India

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