India will consider slapping an additional import tax on steel to protect domestic industries from cheap imports, the country's new steel minister said on Friday.
There are demands to take fiscal measures to stop cheap imports. The issue has to be addressed immediately, Virbhadra Singh said after taking office, but gave no details of the quantum of tax.
India currently imposes a tax of 5 percent on steel imports, which domestic industry would like to see hiked to upto 20 percent.
Singh also said the government would expand production capacity at state-owned firms Steel Authority of India Ltd (SAIL.BO: Quote) and Rashtriya Ispat Nigam Ltd.
He said the output capacity of SAIL could go up to 26 million tonnes in the next three years from about 15 million now, while RINL capacity could reach 6 million tonnes in the next two years from 3 million now.
Singh added both companies would invest 700 billion rupees for the capacity expansion programmes.One of my key priorities would be to ensure that these projects are completed on time in a cost effective fashion, he said.
India's steel consumption is only 46 kg per head against the global consumption figure of 150 kg, Singh added.
It would thus be a key national priority to ensure greater consumption of steel as well as augmentation of production facilities to meet the country's growing steel demand, he said. He added that global steel output had declined by 23 percent in the first quarter of 2009, while domestic output grew at 1.01 percent in the same quarter from a year earlier.
SAIL shares were up 6.2 per cent at 174.50 rupees by 0714 GMT, outperforming a rise of 2.4 percent in the benchmark index .BSESN. (Reporting by Mayank Bhardwaj; Editing by Clarence Fernandez)
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