The Indian Minister of Finance presenting the annual Budget for FY2012-13 proposes to increase the import duty on non alloy flat rolled steel to 7.5% from the present 5%.

Other proposals relevant to the steel industry are a reduction in import duty from 7.5% to 5% for coating materials required to produce electrical steel, the elimination of import duty on nickel ore and concentrate from 2.5% and 7.5% to zero, and to increase the export duty on chrome ore from INR 3000/t (US$55.8) to 30% of the value.

In addition, the import duty on plant for pelletising ore is to be reduced from 7.5% to 2.5% and mining companies will also benefit from a reduction from 10% to 2% on machinery and prospecting equipment.

On the down side, the cost of rail transport is to increase 20% for domestic ore (but reduced 16% for exported ore which anyway incurs a considerably higher tariff). But, at the same time, major investments are to be made in the network with the aim of increasing freight carrying capacity to 1.025bnt. A growth rate of 10% for the railways during the current 5-year plan is envisaged (2012-2017) requiring an investment of INR7.35tr ($137.2bn).