Import duty hiked to help domestic players battle cheap Chinese imports, which are slated to increase after China devalued its currency.
Government has hiked import duty on base metals, including iron and steel, by 2.5% in a move that may help domestic players battling cheap Chinese imports which may further increase after the currency devaluation by China.
Faced with sluggish economic growth and dwindling exports, Chinese central bank on Tuesday decided to devalue its currency, following which yuan has fallen almost 4% in two days.
This is the second hike in duty within two months.
Finance minister Arun Jaitley today approached Parliament seeking to increase the basic customs duty by 2.5% on specified goods falling in Chapter 72 of Customs tariff.
Under the Central Board of Excise and Customs (CBEC), this chapter pertains to base metals, which includes commodities such as iron and steel, copper, nickel, aluminium, lead, zinc, tin, tungsten (wolfram), molybdenum, among others.
Domestic steel producers were demanding increase in duty to check cheap imports from China, Korea and Japan.
In June, government raised the duty on some long and flat steel products by 2.5%. Import duty on flat steel products was increased to 10% from 7.5%, while for long steel products it was raised to 7.5% from 5%.
In June, India slapped anti-dumping duty of up to $316 per tonne on imports of certain steel products from three countries, including China, to protect domestic producers from below-cost inbound shipments.
Domestic aluminium producers have also been demanding hiking import duty as they are facing stiff challenge from China, which is exporting aluminium products at cheaper rates.
Aluminium Association of India (AAI) met Mines Secretary and other government officials last week and sought a level playing field for the producers by raising the import duty on aluminium metals to 10%.
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