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ArcelorMittal Nippon Steel India Ltd expects about 90,000 tonnes of steel exports every month to be hit by government's duty increase, alongside a dampening effect on fresh investments, Dilip Oommen, chief executive officer, said on Monday.
India, South Asia's third-largest economy, raised export tax by 15% on eight steel intermediates and scrapped import duty on coking coal, shortages of which have been driving up steel prices.
"Export duty imposed by Indian government will have repercussion on company's export market," Oommen told Reuters, adding, the company exports 15% of its total production.
Oomen is also president of the Indian Steel Association.
Indian steel firms could be forced to cancel European orders and suffer losses after an overnight decision to impose export taxes on steel products, V R Sharma, managing director at Jindal Steel and Power told Reuters earlier.
Separately, Kaustubh Chaubal, vice-president of corporate finance group, Moody's Investors Service, said the export duty increase would raise costs for domestic steel mills.
The increase in export taxes on iron ore, announced by the Indian government over the weekend, will lead to large surpluses at home, and mainly hit producers of low grade ores that depend on overseas markets, a mining industry body said.
Benchmark iron ore futures in China - the world's top consumer of the ore - rose about 7% in early trade on Monday, tracking their biggest daily jump in two-and-a-half months, as India is one of their major non-mainstream iron ore suppliers.
"This is self-defeating, actually, because there will be a lot of stockpiling," R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries (FIMI), said, adding that exports to China were also declining because of low grade quality of Indian ore.
Production by global miners, including BHP, Rio Tinto and Fortescue Metals Group in Australia, has been disrupted by supply-chain snags and pandemic-induced labour shortages, while Brazil's Vale has also had to weather problems.