Ahead of the Budget, domestic iron and steel players have sought abolition of 2.5 per cent basic customs duty on import of coking coal - a key raw material used in steel making.

Removal of duty on coking coal is a long standing demand of the industry.

At present India’s 85 per cent of demand of coking coal is met through imports, industry bodies Ficci and CII have apprised the Ministry of Steel in a pre-Budget proposal.

“As there is no substitution for coking coal in steel making, import duty of 2.5 per cent on coking coal is redundant as import protection,” the industry demanded in the proposal.

Due to the increasing and volatile coking coal prices, domestic merchant pig iron industry is suffering from huge losses, which forced many players to stop operations, it said.

The industry has forecast that financial year 2030 — the year by which India aims to take it capacity to 300 million tonnes — the demand for coking coal would be at 178.7 million tonnes and 140.2 MT will be met through imports.

However, it also noted that as per the National Steel Policy, the dependence on imported coking coal is supposed to be brought down to 65 per cent by 2030.

Scrap is another element which is posing a threat for the domestic steel manufacturers, the proposal said, requesting the duty on import of scrap should be raised to 10 per cent from the current level 2.5 per cent.

It also sought for BIS standard for scrap besides review MIP of scrap.

“Cheap quality scrap imports have increased by 9 per cent in FY19 from FY17 which has resulted in net forex outgo increase by 58 per cent to $1.77 billion till February 2019.

“No BIS certification or standards are in place for scrap which leads to lack of authenticity on material import. There is also risk of scrap being hazardous and radioactive since there is no norms or check,” the proposal note said.