KARACHI: The prices of steel bars in India are way higher compared to Pakistan despite the fact that Pakistan is a net importer and India is a net exporter of iron ore the basic constituent of steel making.

Last week the average price of steel bars in Pakistan was PKR71,900 while the price of domestic Indian bars was INR53,900 Indian Rupees, which is equivalent to PKR91,650. Hence the prices of steel in Pakistan are still less than those in India a press statement of Pakistan Steel (PS) said.

The Indian Union Finance Minister has recently announced a number of fiscal measures focused on augmenting Indian domestic availability of steel products as part of anti inflationary strategy since steel and steel products contributed about 21.3 per cent of the overall Indian inflation. Steel plays an important part in the economy of India the fifth largest steel producer in the world with more than 53 million tonne annual production.

The Minister announced the removal of basic customs duty (BCD) on pig iron and mild steel products. Hitherto, these items attracted BCD of 5 per cent.

Indian Government fully exempted the import of TMT bars used for construction of houses from 14 per cent countervailing duty. The Indian government has also done away with BCD on three critical inputs for manufacture of steel- metallurgical coke, ferroalloys and zinc.

To dis-incentivise steel export, the Indian Finance Minister announced 15 per cent export duty on hot rolled coils/ sheet and 10 per cent on cold rolled coils/sheets and pipes and tubes and five per cent on galvanized steel in coil/sheet form. However, no new fiscal measures were proposed on iron ore exports.

In view of the foregoing, the Indian steel industry was compelled to lower their prices and they can afford it by decreasing a bit of their profits, it is also to be noted that India is a net exporter of iron ore and have vast reserves of coking coal and the value of its rupee is around Rs41 to a dollar whereas Pak rupee is worth Rs69 to a dollar.

By our correspondent

5/24/2008

Source: www.thenews.com.pk