India's steel ministry has asked the finance ministry for a waiver of import tax on coking coal among a slew of raw materials, as it scrambles to fill a shortage of steelmaking ingredients, two government sources said on Tuesday.

The proposal to scrap levies ranging from 2.5% to 7.5% in the world's second biggest producer of crude steel comes ahead of the national budget for 2023/24 set to be unveiled in February.

The ministry's plan to scrap the tax on limestone, manganese ore, steel scrap, graphite electrodes, chrome ore, and ferro nickel, in addition to coking coal, has been sent to the finance ministry, said the sources, who spoke on condition of anonymity.

"The idea is to import raw materials, whichever is available, at the lowest possible import duty," said one of the sources. "We have asked for a waiver, complete removal."

If agreed, the tax waiver on the raw materials would cost about 37 billion rupees ($449 million), the sources said.

Spokespersons of the steel and finance ministries did not immediately reply to an email from Reuters to seek comment.

Imports of coking coal meet about 85% of India's annual requirements of about 50 million to 55 million tonnes.

Australia is India's top supplier, and a free trade pact between New Delhi and Canberra that takes effect from Dec. 29 allows duty-free imports of coking coal by India.

Stung by a sharp rise in global prices of coking coal, a key raw material in steelmaking, India has been aiming to diversify its purchases.

Indian steelmakers' profits declined this year as global demand slowed and the government slapped an export tax on some steel products.

Last month, India scrapped export tax on some steel grades, but industry officials say it will take time to claw back some of the business lost in traditional export markets, such as Europe. ($1=82.33 rupees) (Reporting by Neha Arora; Editing by Mayank Bhardwaj and Clarence Fernandez)