The government on Tuesday decided to reduce customs duty on steel imports by five per cent to 15 per cent.

The move is aimed at keeping the domestic steel prices, which were moving northwards, under check, steel ministry sources said.

The revised duty will come into effect from midnight on February 24.

Ministry asks PSUs to cut exports

In a bid to provide relief to domestic steel consumers hit by rising input prices, the steel ministry has proposed a series of measures, including a cut in exports by PSUs, and is exploring the possibility of barter deal with major coking coal exporters like China.

"I propose to meet Commerce Minister to discuss various steps to improve the position regarding iron ore and raw material inputs," Steel Minister B K Tripathy said on the sidelines of an international conference on steel in New Delhi.

Asked whether his Ministry was proposing a barter type arrangement with countries like China, a large exporter of coking coal, which is a key input in steel production, Tripathy said he would have a detailed discussion with his counterpart in the commerce ministry.

A similar arrangement is already in place between Brazil and China for trade in iron ore and coking coal.

Pant for VC funds for steel sector

Planning Commission Deputy Chairman K C Pant has favoured venture capital financing for promoting new technologies in steel sector and said further investments were needed to improve overall efficiency.

Speaking at an international conference on steel in New Delhi, Pant said resources from technology development fund and steel development fund should be deployed to develop pilot technologies besides steps to attract venture capital financing.

Reaffirming government's commitment to building infrastructure, he said huge investments in roads and railways are on the anvil and would sustain the resurgence of steel demand.

He said the emerging competitive phase of development would require investment in modernisation and upgradation of technology and a major thrust to raise overall efficiency in the use of scarce resources.

CII welcomes duty cut

Meanwhile, CII President Anand Mahindra welcomed the government's move to reduce the customs duty on steel and inputs used by the steel industry. He said that the step taken by the government would enable a reduction in the cost of steel that would be available to the domestic manufacturing sector and thus increase its competitiveness but also increase the efficiency and competitiveness of the domestic steel industry.

While the reduction in customs duty is a positive step, Mahindra said that the government could consider reduction of the excise duty on construction steel and on GP / GC steel used by the rural sector, from the current 16 per cent to 8 per cent.