India’s steel-export tax is a short-term headwind and is likely to be rolled back when inflation moderates, said Sajjan Jindal, the chairman of the country’s most valuable mill.

The tax has been “imposed with the objective of controlling inflation,” Jindal said in JSW Steel Ltd.’s annual report released on Wednesday. “India is a cost-competitive exporter of steel, and has an opportunity to take on a larger role in the global steel trade.”

The federal government imposed a levy of 15% on shipments of finished products in May to tackle surging local prices. The Reserve Bank of India has raised its benchmark interest rate by 90 basis points since May and is poised to hike further to bring down inflation that has remained above its mandate since the start of the year. 

While there are growing fears of a global recession that would crimp consumption of steel, Indian demand looks set for another strong year due to government plans to upgrade the country’s creaky infrastructure. A reduction in exports from Russia and Ukraine presented an opportunity for Indian producers to supply to Europe and the Middle East, Jindal said.

“The future of the Indian steel industry is exciting with a steadily expanding domestic market,” he said. “The energy transition has provided a significant opportunity for steel players, with huge investments being made in renewable power generation, and transmission and distribution infrastructure, all of which are steel-intensive.”