Food packaging to suffer as duty on scrap steel falls
The FM’s proposal to reduce import duty on seconds and defective steel from 20% to 10% is likely to throw up an unusual victim - the food packaging industry.
By Team ET, TNN |
The FM’s proposal to reduce import duty on seconds and defective steel from 20% to 10% is likely to throw up an unusual victim — the food packaging industry.
While the duty cut was ostensibly meant for making steel scrap cheaper, the steel industry apprehends it could instead trigger off imports of large volume of defective material, which consist of rusted tinplate which are referred to as waste/waste in the industry . These often find their way into packaging of edible oils, vanaspati, dairy products like milk powder, cheese and carbonated beverages.
“The proposed duty cut on seconds and defectives is a retrograde step. It may facilitate imports of poor quality tinplate. As our economy improves we should insist on improving packaging norms. We had in fact asked for a hike in duty on seconds and defectives to the earlier level of 40%,” Mr Moosa Raza, president, Indian Steel Alliance told ET.
“Imports of chemically coated tinplate is likely to go up. These tinplates have one side printed, which is toxic and hence unsafe for food packaging ,” Mr Raza of ISA said. ISA represents interests of domestic flat steel producers like Essar Steel, Tata Steel, SAIL, RINL, JSW Steel and Ispat Industries. Tinplate Company of India (TCIL), one of the largest tinplate manufacturers in the country, with over 35% market share, could be among the worst affected .
TCIL’s managing director Bushen Raina said: “We are trying to find out whether our products will be affected due to proposed duty cut on seconds & defectives. If it does, we could be faced with a serious threat of imports in seconds & defectives.” TCIL exports close to 20-25 % of its production to discerning customers in south east Asia, Europe and the west Asia.
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