Sudarshan Varadhan & Aftab Ahmad

NEW DELHI (Reuters), – Indian steel producers could face cancellations of European orders and losses as a result of a decision overnight to impose export tax on steel products. V R Sharma is the managing director at Jindal Steel and Power.

India placed an export tax at 15% on eight products of steel late Saturday. This comes as steelmakers look to increase their market share in Europe after Russia’s invasion of Ukraine has impacted supplies.

Sharma said in an interview to Reuters that they should have provided us with at least two months’ notice, as we didn’t know of such a significant policy.

Sharma claimed that Indian steelmakers currently have approximately 2,000,000 tonnes in export orders. Most of these are to Europe. However, they remain stuck at ports and in various stages.

This could lead to force majeures. He said that the customer did nothing wrong and didn’t deserve to get treated this way.

According to the World Steel Association, Russia and Ukraine shipped 46.7 million tonnes to Europe in 2020. This was mainly to the European Union which is the second largest steel importer.

He said that the decision could cause industry costs to rise by up to $300 million.

Sharma stated that 260,000 tonnes were ordered by him alone, and they were placed when the export duty was zero.

JSPL (India’s fifth largest producer of crude steel) competes against Tata Steel, JSW Steel and SAIL.

Export taxes on steel were part of a series tax changes on key commodities that aimed to rein in retail inflation which reached eight-year highs.

Sharma stated that removing import duties on anthracite, coking coal, and PCI coal as well as imposing an iron ore export tax, which are key raw materials in steelmaking might not suffice to reduce the export blow.

He said that cooking coal prices remain very high and added that export taxes would be beneficial to local carmakers as well as other heavy-engineering industries.