Alloy steel manufacturers have approached the Ministry of Steel seeking exemption from import duties for direct reduced iron pellets manufactured through the gas or hydrogen-based route. The exemption is sought as part of the ministry's efforts towards green steel production.
Currently, imports of direct reduced iron pellets or hot iron briquettes, both used for steelmaking and which emit less carbon compared to traditional steelmaking raw materials, are subject to a 5% tariff. percent.
In most cases, Indian long steel and stainless steel producers use DRI scrap or pellets obtained through coal-based technologies. Gas-fired ones are usually imported due to non-availability of DRI gas plants at dealer level.
The Association of Alloy Steel Producers of India (ASPAI), in a letter to the ministry, urged the ministry to consider import duty exemption in the budget and consider it as a decarbonisation effort.
“It is clear that while the scrappage policy has been implemented, a recent Department survey on scrap metal has identified significant shortages that are likely to occur in both the short and long term. import duties on DRI/HBI imports (gas basis)... This amounts to zero duty on steel scrap,” said the letter to the ministry, reviewed by businessline.
The use of scrap metal in steel production is considered an option with low CO2 emissions. The import of scrap metal does not generate import duties here.
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