Steel at a steal as duties cut
During his budget speech for Fiscal Year 25, Finance Minister Abul Hassan Mahmood Ali, also revealed that as part of the plan, the regulatory duty on the import of ferro alloys, which are used in the production of steel, will be reduced to 5% for FY25 from the current rate of 15%
The government has proposed reducing duties on the import of raw materials for the steel, beverage, healthcare, and personal care industries, as well as equipment for healthcare services in the upcoming budget, aiming to provide relief for manufacturers and consumers.
During his budget speech for Fiscal Year 25, Finance Minister Abul Hassan Mahmood Ali, also revealed that as part of the plan, the regulatory duty on the import of ferro alloys, which are used in the production of steel, will be reduced to 5% for FY25 from the current rate of 15%.
Additionally, the customs duty for the import of Tetra Pak (Aseptic Pak), a sustainable packaging material for milk, juice, and other drinks, will also be reduced to 0% from the current rate of 25%.
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Ferro alloys refer to various alloys of iron with a high proportion of one or more other elements such as manganese, aluminium, or silicon.
Industry insiders say the country needs about 2.4 lakh tonnes of ferroalloys – including ferro silicon, ferro manganese, and silico manganese – to produce about 1 crore tonnes of steel annually.
However, only Rahim Steel has the capacity to produce ferro alloys, which is not enough to meet the country's demand.
Speaking to The Business Standard in May this year, Aameir Alihussain, managing director of BSRM Limited, said, "A reduction in import duty on ferro alloys by the NBR would aid in lowering production costs, considering we are one of the top importers of this item."
Shahrier Jahan, deputy managing director of KSRM Group, said the move will be helpful for the steel industry.
However, he expressed concern over the base prices of raw material imports during duty calculation. In some cases, officials value them at about 77% more than the import value, he said.
He further said they import ferro manganese per tonne at $1,300; however, customs officials valued it at $2,300. Similarly, silico manganese has been assessed per tonne at the fixed price of $1,160, although the import price is $800.
On the other hand, ferro silicon is imported at $1,200 per tonne, but customs assessment value is fixed at $2,000.
