Following the hike in excise duty on steel from 8 per cent to 10 per cent in the Union Budget, steel manufacturers in the country have increased the price in both long and flat products by Rs500-600 a tonne from 1 March.
Following the global financial crisis, the government had reduced duties on steel from 14 to 8 per cent from December 2008 in three stages in order to spur economic activity.
Steelmakers in India, unlike their counterparts in the US, Europe and Japan, did well during the recession on the back of government spending on huge infrastructure projects as well as the booming domestic automobile sector.
But with the government partially rolling back the fiscal stimulus in the Union Budget this year by raising the excise duty on steel by 2 per cent across the board, steel manufacturers are passing on the hike to the consumer.
Prior to the price hike, prices of long products used in the construction industry were between Rs27,000 and Rs29,000 a tonne, while the price of flat products, used mainly in the automobile industry, was Rs34,000-36,000 a tonne.
Most of the steel manufacturers have raised the price for both long and flat products by Rs600 a tonne effective 1 March 2010.