Budget 2024: Metals and mining industry seeks spending boost on infrastructure, logistics

In the interim budget, the sector was disappointed by the lack of specific announcements or allocations.

Ahead of the upcoming Union budget, the metals and mining sector will be watching out for two critical aspects: increased infrastructure spending to propel growth in the domestic metals industry, and announcements related to enhancing logistics infrastructure in mineral-rich areas, apart from duty reductions for cost savings.

"Access to infrastructure is an issue in India. To produce 300 million tonnes  of finished steel by 2025–26, the total transportation need of the steel sector is expected to be about 1,200 million tonnes. As most new steel plants are likely to be situated in resource-rich states such as Odisha, Chhattisgarh, Jharkhand and Karnataka, these areas will become steel hubs needing access to infrastructure," the Federation of Indian Chambers of Commerce & Industry said in its budget recommendations report.

In the interim budget, the sector was disappointed by the lack of specific announcements or allocations. The industry had been seeking a removal of  import duties on critical minerals. There has also been a call for increasing export duties on finished steel products to ensure the availability of steel for domestic consumption and to curb excessive exports that could lead to shortages within the country.

Here are some of the top items on the metals and mining sector's wish list.

Respite from Chinese steel imports

The domestic metal industry in India has been facing challenges due to the influx of Chinese steel imports.  The industry has been seeking protection against these imports, and the Directorate General of Trade Remedies (DGTR) is yet to impose any duties on Chinese steel.
Reportedly, India's steel and trade ministries are in talks over rising imports, particularly cheap Chinese goods.

Rationalisation of taxes on key inputs

The industry is seeking other support measures from the government such as infrastructure development and rationalisation of taxes on key inputs like natural gas, coking coal, electricity and iron ore.
"Power costs are a critical concern for our industry, especially with the mandate to switch to renewable energy by 2030. Any incentives in the Union Budget to expedite this transition and encourage investment in renewable energy would be welcome," said Prem Khandelwal, chief financial officer, Indian Metals and Ferro Alloys Ltd.

Earlier in the year, Jindal Stainless had proposed long-term exemption of basic customs duty on ferro nickel and ferro molybdenum.

Financial incentives for critical minerals mining

As India transitions to renewable energy, the demand for critical minerals for batteries, solar panels and wind turbines is set to increase. Thus, scaling up exploration is crucial to secure a steady supply of these materials to support the country's clean-energy goals. However, exploration companies are apprehensive of taking up critical mineral blocks over economic feasibility of projects and the possible financial implications. Exploration firms expect a viability gap funding mechanism or a similar provision for the mining sector.