Mumbai, May 23 (Representative) The real estate industry, which has been grappling with high input costs amid rising commodity prices, has welcomed the government’s decision to reduce import duty on raw materials of iron and steel saying it will improve the overall sentiment in the sector. Last week Finance Minister Nirmala Sitharaman announced a reduction on import duty of raw materials including coking coal and ferronickel to reduce the cost of domestic production of steel products. At the same time, in order to increase domestic availability, the government announced a hike in the duty on exports of iron ore by upto 50 per cent, and a few steel intermediaries to 15 per cent.
This decision is expected to provide relief to the real estate sector which has claimed that rising prices of steel and cement had pushed up construction costs by Rs 400-500 per sqft. “The move to reduce the import duty on raw materials of iron and steel and steps to ease supply of cement would help curb the inflation and the soaring prices in the real estate segment. High input cost have been impacting the developers over the past several months and property prices too have seen an uptick of late, bringing concerns for the nascent recovery of the realty sector in the country,” Rajan Bandelkar, President, NAREDCO said.
Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers noted that developers have been under pressure to raise prices as cost of construction materials have seen a double-digit surge in recent times. “As per Colliers initial estimates, the cost of construction was likely to rise by a further 8-9 per cent by the end of 2022. In this scenario, the government’s intervention to control this rise by rationalising duties and taxes on key inputs is timely and is likely to have a positive trickledown effect to the end consumers,” he added.