BENGALURU: Indian shares closed lower on Monday after a volatile session, weighed down by a sell-off in metal stocks after the government imposed heavy export taxes on steel products, while gains in automobile stocks helped cap some of the losses.

The NSE Nifty 50 index was down 0.32% at 16,214.70 at close, while the S&P BSE Sensex fell 0.07% to 54,288.61.

The Nifty Metal index, which saw its worst day since March 2020 in the session, settled 8.1% lower. JSW Steel and Tata Steel were the top losers on the Nifty 50 index, falling 13.2 and 12.6%, respectively. India on Saturday announced a series of changes to the tax structure levied on fuel and crucial commodities in a bid to help fight surging inflation.

The country imposed an export tax of 15% on eight steel products at a time steelmakers are looking to make up for tepid local demand by increasing market share in Europe, whose supplies have been hit by Russia’s invasion of Ukraine.

“Prospects of additional market borrowings by the government of India in the wake of the tax cuts on fuel to tame inflation came to the forefront,” said S Ranganathan, head of research at LKP securities.

However, Reserve Bank of India governor Shaktikanta Das told CNBC-TV18 in an interview on Monday that the Indian government would likely stick to its fiscal deficit target as specified in the budget and there may not necessarily be a need for increasing government borrowing just yet.